Is Cryptocurrency Speculation Just Another Form of Unregulated Gambling?

Whether or not you’re an investor yourself, you’re probably aware by now that cryptocurrencies have crashed in 2022.

As of the morning of July 28, 2022, Bitcoin is selling for $23,115. Eight months ago, it was at an all-time high, north of $68,000. Ethereum has fallen from over $4,800 to around $1,600 in a similar span.

The supposed “stablecoin” Terra, whose value was designed to hold steady at $1, now sells for about 3 cents after its companion currency, Luna, tanked. Luna itself was once worth over $145 and is now effectively worthless.

There are countless more examples, but there’s no need to belabor the point. Anyone simply holding a supply of major cryptocurrencies has probably seen the value of their investment drop by about two-thirds in under a year. Many of those using leverage or dabbling in newer, riskier crypto assets have lost their shirt. Looking at some of those outcomes, it’s hard not to see parallels with the tragic results of gambling addiction.

At Bonus, we advocate for regulated online gambling. The strongest argument for it is also the simplest: You can’t stop people from gambling, especially on the internet. Where it’s illegal, people will find an alternative, be it a black market offshore site or some gray market workaround – something that scratches the same itch while skirting the jurisdiction’s technical legal definition of “gambling.”

Those black and gray market products are almost never safer than a legal, locally regulated gambling site.

Is cryptocurrency being used as this sort of gray market alternative to gambling? That’s debatable, but there’s at least some circumstantial evidence that it is. Bonus has found that countries with high cryptocurrency ownership rates tend to have economic conditions conducive to gambling yet lack legal online gambling options.

It’s Not the Product; It’s the Behavior

Legal definitions of gambling focus on the product itself. They usually involve the idea that something of value is being risked for the potential of a larger return and that the outcome depends on chance.

That’s by necessity. It’s easier for governments to decide the legality of a thing than to police how people use it. Outside the legal sphere, it’s more helpful to look at gambling as a behavior rather than a product.

For instance, most governments consider sportsbooks to be a gambling product and the stock market not to be. However, an arbitrage bettor is arguably not gambling, as they’ve found a way to guarantee a win regardless of the event’s outcome. Conversely, a day trader dabbling in options without researching the companies in question is effectively treating the market like a casino.

Cryptocurrency is decentralized and pseudonymous by design. Unfortunately, that makes research into users’ habits very difficult. However, even if we can’t tell exactly who is using crypto, there is at least some patchy data about where it’s being used. That, in turn, provides some useful insight.

Which Countries Have High Cryptocurrency Ownership Rates?

Bonus found three separate online sources attempting to estimate the crypto ownership rate in various countries. For clarity, this means the percentage of citizens who own or use any cryptocurrency at all, without regard to the total value of the holdings. The latter would be less useful, as the bulk of crypto assets belong to a small number of “whales,” whose holdings would skew the figures.

The three sources are:

Each looked at a different set of countries and presumably used a different methodology. As a result, there are significant differences between their respective estimates.

That said, there is also a large amount of overlap. For instance, all three sources place these countries near the top of the list:

  • Kenya
  • South Africa
  • Thailand
  • Philippines
  • Brazil

There are also some that two of the three rank very highly, but the remaining source has no data for:

  • Ukraine
  • Vietnam
  • Nigeria

Using all three sources, Bonus has assembled our best guess at the top 20 for cryptocurrency ownership. You can find the full table at the bottom of this article.

Factors for High Cryptocurrency Ownership Rates

Looking at just those listed countries, you probably already have some observations. Contrary to what one might guess, these aren’t especially technologically advanced countries or particularly wealthy. In fact, they’re all fairly poor by Western European and North American standards.

And yet, the list of probable top 20 countries also includes the likes of the United States, United Kingdom, Netherlands, Germany and France. (Statista disagrees with the other sources on this.)

Our list includes countries as high as eighth in per capita GDP and others as low as 115th (out of 180).

Most Top Crypto Countries are Also Leaders in Wealth Inequality

There is, however, one economic factor that both the wealthier and poorer countries on the list share: They almost all have high wealth inequality as measured by the Gini index (aka Gini coefficient). This is a statistical construction where a value of zero corresponds to a country where all wealth is shared perfectly equally, and a value of one corresponds to a country where a single person holds all the wealth.

Of our probable top 20 countries for cryptocurrency ownership, 12 are also in the top 25 out of 180 for wealth inequality.

Of the top ten for crypto, five are in the top ten for the Gini index, and another two are in the top 25.

Moreover, out of all 20, only Pakistan is below the world median.

Most Top Crypto Countries Lack Full Regulated Online Gambling

Another interesting connection between the countries in question is that they skew towards prohibition when it comes to online gambling. This is especially true towards the top of the list, while a few regulated jurisdictions creep in among the wealthier countries at the bottom.

Of the top 10 countries for crypto ownership rates:

  • Four have banned online gambling entirely
  • Two are gray markets, having failed to address the topic at all
  • Three have limited regulation, restricting online gambling to specific products or certain regions of the country
  • One – Ukraine – has regulated online gambling, but only as of 2020

The Connection Between Wealth Inequality and Gambling

The question, then, is what the connection is between wealth inequality and the decision to buy or use cryptocurrency. In the absence of actual scientific research on the subject, we can only speculate.

One thing we do know about wealth inequality is that no one likes it (even if they think they do). Research shows that everyone – even those in higher income brackets – is less happy in a country with higher inequality. One likely reason for that is that humans tend to evaluate our lives in comparative terms. When wealth inequality is high, that can lead to unhealthy obsessions with economic status and the Keeping up with the Joneses Effect.

It stands to reason that attempts to “get rich quick” might flourish in such conditions. This is a significant driver of gambling and one of the more dangerous ones. Healthier gamblers do it for entertainment. Those hoping to win money to supplement their income (or win back what they’ve already lost) are at greater risk of developing problematic habits.

Despite the sparsity of good research on gambling, there is some evidence of this connection. For instance, one study out of Italy showed significantly higher rates of underage gambling in regions of the country where wealth inequality is also higher. Meanwhile, some research in the US shows that both very high and very low earners gamble more than those closer to the median income.

Where Legal Gambling is Absent, Gamblers Seek Alternatives

The other thing about many countries on the list is that they’re socially conservative. Most, if not all, gambling is banned in many African, Middle Eastern and Southeast Asian nations on moral or religious grounds. This is why many of our top ten crypto countries are black or gray markets for online gambling.

The same is also true in the US. Currently, only six states have fully embraced regulated online gambling. In a country of about 330 million, over 290 million still live under prohibition for online casino gambling.

When you pair high demand with prohibitionist policies, it’s a recipe for black markets. We see that already with online gambling, in the form of a booming international market for unregulated offshore casinos.

However, another thing you get is replacements for the banned or restricted product being marketed as something else entirely. Alkyl nitrates (aka “poppers“) get sold as leather polish or air freshener but then used as a recreational drug. In places where abortion is illegal, drugs for other conditions get repurposed towards that end. Daily fantasy sports owe their existence to the since-repealed US ban on sports betting.

Cryptocurrency advocates tout all sorts of benefits to the technology, both current and future. Whether or not one agrees with them, it’s hard to look at the discourse on social media and avoid the conclusion that the general public is more interested in the volatility of cryptocurrency prices than its practical applications.

Factoring in these observations about where it’s popular and what those places have in common, there’s a case to be made that, for many buyers, cryptocurrency investment is simply gambling under another name and with a different legal status.

List of Countries by Crypto Ownership Rate and Wealth Inequality

Here are the top 20 crypto countries Bonus obtained by taking the average of the ranks supplied by BrokerChooser, Triple-A and Statista.

For each country, we’ve also provided the legal status of online gambling and its global rank for wealth inequality. The latter is based on 2019 Gini coefficient statistics published by Credit Suisse.

BrokerChooserTriple-AStatistaWealth Inequality RankOnline gambling?
Ukraine12N/A6Recently regulated
Nigeria7N/A121Gray market
Kenya35974Gray market
South Africa64722Sports only
United States43234Regional
United Kingdom9135573Regulated

About the Author

Alex Weldon

Alex Weldon

Alex Weldon is an online gambling industry analyst with nearly ten years of experience. He currently serves as Casino News Managing Editor for, part of the Catena Media Network. Other gambling news sites he has contributed to include PlayUSA and Online Poker Report, and his writing has been cited in The Atlantic.
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