Tuesday, November 24th, 2020 | Written by Renee
The current price of Bitcoin has now crossed the $18,000 mark. Just about six months ago, that figure was halved. The wild increase meant a lot of people now want to have as many Bitcoin as possible to boost their funds, among them are poker players who are now choosing to withdraw their winnings in the digital currency.
WPN Reports Record Number of Bitcoin Cashouts
Winning Poker Network (WPN), one of the first few sites to adopt Bitcoin, recently reported a massive surge in Bitcoin cashouts from players, as a result of the current rally. The network, which runs a number of online poker sites, including Americas Cardroom, has had to go out and buy millions of dollars’ worth of Bitcoin every day to keep up with the demand.
According to Phil Nagy, WPN Chief Executive, over 90% of their current payouts account for customers requesting for Bitcoin, as the cryptocurrency continues to surge.
The high demand also meant brokers are charging higher fees of up to 1.5%. Nagy said majority of their transactions are carried out in Bitcoin, equating to around $100 million a month. Most of their customers are based in the US, that’s despite the fact that online poker remains illegal in most parts of the country.
Bitcoin’s price currently sits at $18,419 and the trend shows no sign of a potential decline. In fact, price projections and forecasts from industry experts indicate the value of Bitcoin could go as high as $20,000 before the end of the year. The present surge somehow resembles that of 2017, when it rose by nearly 1,400%, only to drop by more than 70% a year later.
The massive price swings are one of the drawbacks of cryptocurrencies like Bitcoin, and the WPN is well aware of that, that’s why the company makes it a point to convert it into fiat money and not hold on to it for too long.
But there are instances when the site is left with no choice but to get stuck with it, especially when the digital currency experiences huge price crashes. On these occasions, players would go to the site and deposit hundreds of thousands in Bitcoin to try to convert them into cash.
Why Poker Players Are Using Bitcoin
Poker players who withdraw their winnings in Bitcoin get the chance to enhance the value of their money. This explains the increasing number of players requesting for Bitcoin cashouts. Apart from that, Nagy said some players also believe that by using Bitcoin, they can avoid taxes, especially as most of the players on the network are Americans. Many of them believe that transactions done in cryptocurrency are much more difficult to track for US authorities.
The coronavirus pandemic gave rise to a massive surge in online traffic, which in turn benefited the online gaming industry. Online poker reported record numbers during the lockdown period, as casinos and poker rooms worldwide were closed to prevent the spread of the virus. This also led to the growing use of Bitcoin at online poker sites, something which could go on for an extended period given the current COVID-19 situation.
An increasing number of poker players now use cryptocurrency because of its decentralized nature. It is more convenient to use and easily accessible, but also transparent and more reliable. Furthermore, users can save on fees as there is no need for middlemen in making transactions.
Bitcoin Attracting Institutional Investors
The recent surge of Bitcoin is also drawing institutional investors. According to blockchain analysis company Chainalysis, the number of Bitcoin holders that are stocking up on the cryptocurrency has now reached record levels, making up for 77% of all mined Bitcoins.
Meaning retail buyers are left with just 3.4 million of available Bitcoin. Experts say interest among institutional investors has likely contributed to the surge in Bitcoin price, though other factors, such as the involvement of the Chinese government, has also driven the value up. China has a huge influence on the market given that it is controlling 70% of the Bitcoin hash rate at the moment.