Crypto corner: how the crypto winter might affect the online gambling industry

It is only just October, but winter is already here. Crypto winter, that is – a prolonged downturn of cryptocurrency prices, or bear market, which experts have been predicting for a few months now. But when it comes to market predictions, the crypto space remains a relatively new one, and while prognoses are a dime a dozen, it’s hard to know whether any of them will prove accurate.

Some say cryptocurrencies are headed for a further fall, with analysts forecasting bitcoin plummeting to a low of $10,000 and erasing most of the gains of recent years, while others believe bitcoin could hit $100,000 by the end of 2023. One inevitable truth is that the crypto winter might still get worse before it gets better.

But this is not the first winter to hit the industry: the last real downturn took place between January 2018 and December 2020, when bitcoin lost almost half of its market cap. It follows that by examining the lessons we learned from that time, we could better determine where and what we should be paying more attention to now that we face a similar situation. When it comes to much-hyped Web3 innovations, for example NFTs, once the hype dies down it’s very clear whether projects are not well-funded or have limited utility.

The upside of blockchain

On the brighter side, the interest for more industrial blockchain uses is rising unabated. A corporation looking to make its processes more efficient, secure and trustworthy is not monitoring the price of bitcoin, but taking its own approach to exploring the space. I believe that blockchain will create much more activity in areas such as data security, provenance, logistics improvement and KYC, rather than NFTs and metaverses. These industrial uses are perhaps more boring than the various flavours of the month that our current ecosystems like to appropriate as their most recent focus, but they might prove stronger and longer-lasting.

Ultimately, I am generally encouraged by the growing inflow of more substantial and specific use cases, such as seeing blockchain applied to the gambling industry in order to benefit from the security, privacy and transparency that this technology can provide. KYC is so crucial to the gambling industry and could especially benefit from a blockchain with an ID-layer at the protocol level aimed at balancing privacy with accountability. This would eliminate double signups, fake transactions and fraudulent wins, while preventing minors and gambling addicts from accessing the platforms. With faster and safer transactions, businesses would be able to reduce managing costs and make their processes significantly smoother, which is exactly where blockchain excels.

There’s also something to be said about how the current crypto bear market comes at a time of intense global talk of regulations, so there’s a chance that anyone who spends this winter meticulously planning for growth and innovation could see their work pay off once the market mood inevitably gets a bit lighter and entirely new sets of regulations are put in place. By then, people might be able to better appreciate the industry’s ability to sustain periods of downturn and emerge from them with renewed strength, and we might even see an uptick in confidence related to all things Web3, including blockchain and cryptocurrencies.

Because once all the buzzwords and hype are removed, blockchain is really about secure data, sage data registration and easy, immediate transfer of ownership – and, most importantly, trust. In a truly innovative and inherently transparent manner, the technology can promote the kind of system of trust that the gambling industry will always aspire to incorporate: no middle men, decentralised records, instant and error-less transactions, smooth and efficient processes. That is where blockchain can, and will, continue to make a concrete difference for industry after industry. Winter or no winter.

Lars Seier Christensen is chairman of the Swiss non-profit Concordium Foundation. With over 30 years of experience across the banking and financial sector, Seier Christensen is a global pioneer in FX and derivatives trading, having co-founded the online trading and investment platform Saxo Bank in 1992.  He served as co-CEO of Saxo Bank for more than 20 years, during which time the bank grew to 1,500 employees across 150 locations serving customers in 170 countries. Seier Christensen is also the founder and sole owner of Seier Capital, a private equity and venture capital firm which specialises in investments in angel, seed and A-round stage companies. The firm invests in art and fashion, financial services, food and beverages, sports and entertainment, social media and technology industries.