Depending on who was writing the article, I'd have a hard time taking this headline seriously, but it's something that comes up often enough that I think it's worth visiting from time to time.
Most recently, Gary Gensler likened stablecoins to house poker chips at a casino, painting the "wild wild west" picture for us all to accept. I have no problem shooting the entire premise down, but it is a clever way of framing our industry, so that all elements sit outside the mental image of fiscal responsibility.
We all have had questions about Tether at one time or another, but it's still used for tens of billions of dollars of activity every day without signs of slowing (unless the government forces a scare to happen, and the real question at hand is whether anyone has issues getting in and out of any positions, holding, staking, or withdrawing any Tether. Have you? I haven't.
The accusation is like a musical-chairs where they believe someone's going to get stuck with a worthless casino chip that the house won't redeem. Let's hope it doesn't happen, but the only entry/exit issues I'm aware of with any Tether issued is if there is a freeze for maintenance coming from an exchange, not the company, and if someone hacks a platform causing suspended activity until investigations end.
The broader context is the idea of comparing trading to gambling, and that the only smart move in crypto is to pick the right coin and HODL.
The truth is that there is some guess work on all of us. For the loudest, most vocal of the crypto landscape, not a single person is 100% certain what the outcome is going to be with all of this stuff. But, the thing is, you start to widen the net based on making informed decisions, and there's literally nothing in life that isn't a gamble except salvation through Jesus. Many, if not most, will beg to differ- that's fine- Gordon's not looking to take the bait.
Someone could play it safe, so to speak, and invest only in low-risk mutual funds. Maybe they'll outperform the devaluation of the dollar once you take profit and remove cap gains. Maybe not. No one is offering any guarantees. You can lock up money into an IRA, 401K, CDs, the latter which are a fixed, guaranteed rate and yet, with corruption at every level of government, who's to say they don't decide to arbitrarily change the rules at any given moment?
They've tried, in my US Fed, to sneak in a tax on unrealized gains. Imagine that. You don't even have a profit and they want to tax it. I wonder, would they have changed the rules on how much you can write off by allowing unrealized losses? That would have come in handy in 2018! They tried to change the exemptions for changing and rolling over IRAs so there would be no tax advantages there, so when agencies tell me to watch out for a run on the digital banks and we're at $30T in over-spending and they don't see any issues with inflation, you'll forgive me if I'm willing to take a few risks outside their better judgment.
Having said all of this; something unforeseen could happen to Bitcoin. Something bad could happen to Tether, Ether, Litecoin, ChainLink fences and Doggy coins, ADA could get ADHD and NFTs could get sold to the NFL. None of this means that trading is the same as gambling.
That's where I'm headed with all of this. Traders are not the enemy to HODLing, but gambling is a guaranteed loss against the house. When you look at a sector like Wall Street, when they follow pre-defined best practices, they tend to find very cushy ways to steadily earn a profit, but that can be dramatically outdone given a long enough, patient, well-researched streak in crypto trading. The thing I would avoid most is the pump and dump groups, and the so-called trading group leaders that bring little attention to how much they are losing for everyone, but hype that one time they are right.
If you know your asset, study the trends, learn the indicators, and take an interest in a certain pace of the market, there is money to be earned trading, and no one is saying that money can't be applied to HODLing your favorite crypto with profits made. In fact, you can trade against pairs like BTC or ETH and simply focus on earning more of them, but I will tell you; do not underestimate the likelihood that even the most hyped coins are going to get pressured downwards over time.
Gambling assumes you're betting on something that is technically impossible to make an educated guess on. All of the notions about which horse performs best or which boxer has an advantage are all out the window when game's on, and even probability can't account for the races rigged we'll never know about.
At the casino, people will feel the sides of slot machines because they believe the warm ones are about to pay off. Others will watch someone that's been playing a machine for hours, assuming that when that person leaves they're much more likely to score a jackpot after them. The machines are quite literally rigged to pay out a certain amount. They aren't even operating according to randomness.
People win the lottery every year, but there's nearly 8 billion of us, and the lucky ones are that one guy here, one gal there. People buy tickets for their chance to win tens of thousands of times/day and none of them hit the biggun. That's gambling. Blackjack is a game that leans a little more on skill and a person could get good at counting cards, but that's why they play with a thicker shoe (that's casino talk for saying they shuffle 4 or more decks of cards to make it nearly impossible to hedge the odds). If someone learns to gain an edge on the house, they are banned, usually their chips taken, and despite local laws that protect the player from such things, everyone's on the casino payrolls so if they don't want you, you can forget about playing once you've beaten their game.
Now, I will be completely fair, I've been burned 3 times badly by exchanges and bad practices, with a survivable outcome each time. I've also had a hunch about exchanges that were a total scam and warned people left and right, and in cases like that I test maybe $20 worth of crypto in case it's just an undiscovered gem. I can see how we must be diligent as the users of the crypto space, but regardless of the terrible things I've experienced, I'm just as dedicated today as I ever have been, because I've only gotten better at my trading accuracy every week I do this.
Gambling? I don't think I'd last a day. Red? Green? Who knows what color it's going to land on. But, I can study chart candles, bollinger bands, stochastics and the VWAP (yeah, that's a thing!) and get things right 80% of the time, and for the other 20% it's a matter of paying close attention to what stupid thing my government is about to say or whether Putin wins a hand of 3D chess again, and that usually tells me whether to continue buying the way down or whether we're heading into another Friday liquidation dance. The casino is guaranteed to win 57% of the time. Imagine knowing you are guaranteed to beat the odds so much that 1-7% is the only margin you need to make billions every year. Crazy.
Others who operate according to a set plan of risk vs reward in trading will look for calculated opportunities that offer a much higher up side to their down, and they set a stop-loss so their losses never outweigh their guessing things correctly. The idea for them, is that if they choose good assets, study their hourly and daily trends, make an assumption about a good entry, then they are likely to be right just ever so slightly more than 50% of the time.
The sophisticated risk/reward trader is looking to take an intelligent guess, but even then it isn't the same as gambling, although it is a little bit closer than my process. If statistics would say they are right 50% of the time, and they can use indicators and market intelligence to guess on good positions and improve those odds even 1-2%, then they set a stop loss let's say for -5%, but look to take a profit of, let's say 10%. As long as they don't guess wrong more often than not, they will end up in profit. No one can force that to happen at the blackjack table, unless they count cards, in which case they get the boot.
I could yap a lot more about this, but I'm always reminded how I tend to go on at length, so for now, Crypto Gordon Freeman, at this risky juncture... for now... yeah I said it twice... out.
