The iGaming industry is more popular than ever, with Bitcoin ETFs leading skyrocketing growth. This popularity is primarily due to its convenience, risk mitigation, and diversification in this immersive landscape. But how?

Well, it is simple. First and foremost, it provides a pretty quick and easy way to actively participate in the crypto market without dealing with complexities of any kind. Second, experts will tell you that ETFs are a more stable entry point in the market. Lastly, online gambling platforms that accept Bitcoin ETFs open an array of opportunities for users to diversify their portfolios and benefit directly from Bitcoin’s price movements. Here, you can see the top online casinos with bitcoin. 

With such an array of benefits, one question arises: what are the risks and rewards of using Bitcoin ETDs for iGaming? We will answer this question in this article. So, tune in!

Risks of Using Bitcoin ETFs for Online Gambling 

There are two of the most common Bitcoin ETF types in iGaming. As you can imagine, each of them encompasses various risks. Let’s take a closer look at them:

Spot Bitcoin ETFs

By definition, the Spot Bitcoin ETF directly tracks the cryptocurrency’s price. Thus, it involves several risks: volatility, market manipulation, liquidity, and security risks. 

In other words, Bitcoin ETF mirrors the volatility of crypto, there are a number concerns arising regarding the process of market manipulation. At the same time, liquidity varies, depending on whether you buy or sell shares. Security challenges can include wallet management, as well as the rising issue of hacking. 

Bitcoin Futures ETFs

Bitcoin Futures ETFs operate based on investment in future contracts with Bitcoin. As you might have guessed, some risks are also involved, particularly price discrepancies, rolling contracts, and leverage and counterpart risks. 

This means that futures prices may deviate from spot prices based on market devices, and regularly rolling futures can lead to some unpredicted costs. Meanwhile, some future ETFs use leverage, affecting gains and losses, and their exposure to the future market involves the risk of the counterparty. Thus, it is essential to consider the level of your risk when considering Bitcoin ETFs. Keep in mind that due to volatility, prices can be unstable and swing from time to time.

Furthermore, you have to determine your investment goals, whether it is speculation, heading, or portfolio diversification. For instance, ETFs are an excellent tool for those looking for short-term gains. As for pals who root for hedging, future ETFs can hedge against Bitcoin price fluctuations. And portfolio diversification—well, it is always a good idea. As Warren Buffet said, “Don’t pull all eggs in one basket.”

What about Rewards?

Now, let’s talk about rewards for Bitcoin ETFs. Surprise-surprise, but they also differ depending on the type of the ETF. So, what are the rewards?

The rewards for Sport Bitcoin ETF are impressive, from direct exposure to regulation to convenience. In short, investors gain direct exposure to the cryptocurrency’s price fluctuations while sporting ETFs operate within the regulatory framework. Nevertheless, one of the most significant rewards is that users do not have to manage Bitcoin. 

The picture is different with Bitcoin Futures ETFs. In this case, rewards include diversification, regulation, and risk management. So, this type of ETF is more exposed without holding actual Bitcoin while operating within regulatory frameworks. Plus, hedging strategies reduce the risk involved.

As you can see, different types of Bitcoin ETFs offer distinct risks and various rewards. The best way to determine whether they are your cup of tea is to understand your risk tolerance and investment goals. Only by doing that will you be set and ready to conquer a rapidly growing iGaming industry!