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Crypto ecosystem: FTX’s crash, BlockFi’s file for bankruptcy and their effects on crypto gambling

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In less than a month, two interrelated critical events have shaken the crypto ecosystem, including the crypto exchanges, the crypto companies, the crypto investors, the crypto gambling sites -such as those available at https://crypto-gambling.tv/de/– and of course the crypto users and the crypto gamblers. But which are these events, and how they are influencing the crypto gambling industry? Let’s see how things have evolved.

FTX’s collapse came as a shock to nearly everybody who is involved either directly or indirectly with the crypto market. But what happens now feels like a contagion, a chain reaction, which can potentially bring down other crypto exchanges and crypto companies in what may come as a snowball effect.

BlockFi, a digital asset lender, has filed for bankruptcy, less than a month after FTX’s crash. Notably, BlockFi was financially linked to FTX, with Sam Bankman-Fried providing a security blanket (of $400 million creditline) for the crypto lender back in June 2022, when FTX was still a reliable, credible and financially sound exchange. The collapse of the crypto exchange brought into light the deep-rooted problems of intertwined operations, functions and financials. BlockFi’s fate was sealed when FTX filed for bankruptcy on November 11.

The crypto ecosystem seems now to be tackled by ‘black swan’ events – in fact one black swan event that shook everybody to the core and subsequent, following booming events that are mounting the already fragile and tense situation. And analysts believe that these events are going to affect everybody in the crypto market. 

Is cryptogambling the victim of the crash?

Deductively, everybody means the crypto users as well. But what about crypto gamblers? Are they going to be affected and if yes how?

Everytime we hear a crypto company go down, immediately a bigger collapse comes to mind – a collapse that might drift the entire crypto ecosystem. But even if there is a domino effect, how can this influence cryptogambling?

In theory, cryptogambling is not going to be the victim of the shocking events. In practice, however, there can be some critical effects such as greater reservation and stronger skepticism towards the cryptos overall. 

There are two basic assumptions:

* The first assumption is that cryptogambling is fundamentally a procedural thing and not an investment thing. Cryptogambling doesn’t involve crypto-investments, but crypto-transactions. Cryptocurrencies are used only for making deposits and payments (occasionally and withdrawals). The risks involved are, therefore, minimal and not really linked to the collapse of FTX and the bankruptcy of BlockFi. 

But all the while, even if there is no direct linkage, gamblers will be more skeptical and conservative with using cryptocurrencies, when core agents of the ecosystem fall down. There can be something like a wave of distrust over the crypto market as a whole.

So, practically, despite the lack of clear implications of FTX’s and BlockFi’s crashes on cryptogramling, it is anticipated that people will be far more reluctant in using cryptos for their gambling-related transactions.

* The second assumption has to do with what many analysts believe about the world of cryptos being so intertwined with the world of gambling. If one world collapses, then the associated elements of the other world are deemed to collapse too. 

This assumption gets more realistic, if we consider that cryptocurrencies have inherent the aspect of gambling, which for many experts it is more like investing. If we accept that there are elements of gambling within the cryptomarket, then there is definitely a reason to believe that cryptogambling will slow down. 

Or not?

Both these assumptions, however, rest on another assumption: that cryptogambling is fundamentally comprised by crypto gamblers who are just using cryptos for the plain comfort, ease, speed and practical benefits that they offer.

This is hardly the case – crypto gamblers for their most part have chosen to use cryptos because they see an entire future in the crypto world and they are active supporters of the decentralization and transparency that they offer.

For them, it is more an economic philosophy, a breakthrough innovation, a disruption of the ills of the economic system. And in fact, they use cryptos where they are most applicable at the moment, the crypto gambling market! So, the collapse of FTX, the bankruptcy of BlockFi and any other crashing event that may come, is not likely to influence their perceptions, beliefs and thereby, their actions.

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