Chatting with my wonderful friend on discord this evening gave birth to this tricky question.
" Is buying into cryptocurrency gambling? "
My friend says investing in cryptocurrency is gambling, but i chose to disagree with him. Here is my own opinion why i believe investing in cryptocurrency is not gambling.
[img source: pixabay CCO licensed]
Defining gambling and Investment
According to the definition from dictionary.com, gambling simply means
To play at any game of chance for money or other stake
On the other hand, investing means
To put (money) to use, by purchase or expenditure, in something offering potential profitable returns, as interest, income, or appreciation in value.
Although looking at the above words, their definitions are almost similar but the difference is
The word gambling mainly talks about "Winning". in investing, you don't win, profits is been made. Similarly, we don't win by investing in cryptocurrency, profits are made.
In investing, something that appreciates in value is bought with the hope of it appreciating in value. while in gambling, nothing appreciates in value, all you do is win a stipulated amount. Coins that have value are been bought in cryptocurrency, and they appreciate and depreciate as well just as in forex.
Finally, in gambling, if you stake all your money, you can loose everything in just a blink of an eye. But in crypto investing, you can set stop loss, and go away with the rest of your money if you choose to.
I see investing in general as a 50/50 opportunity, but that doesn't make it a gamble. Rather i will say its a calculated risk. I will like to receive comments from you guys and know what you have to say about this topic. Please feel free to share your views with me.
Thanks