It’s been almost a decade since the first bitcoin exchange emerged and cryptocurrency trading is starting to mirror trends seen in gaming: namely the growing popularity of competitions and opening up of new social interactions.
Apex, Fortnite and PUBG, have transformed the gaming industry, opening up the world of esports competitions to a whole new audience. Every gamer is welcomed to win how they want.
The growth of eSports has also empowered skilled gamers to capitalise on their performances and interact with competitors in new ways.
The rewards have sometimes matched that of professional sportspeople. For example, the winner of the Fortnite competition in 2018 earned $3 million (approximately the same as the prize for the prestigious Wimbledon Tennis championship).
Trading is a skill, just like gaming
We've seen the trend of competitive battles bleed over into cryptocurrency trading.
Trading competitions have existed in the cryptocurrency market for some time but have frequently been one-off promotional events, based on trading volume (skewing the odds in favour of large traders), or the awards were in illiquid cryptocurrencies - instead of bitcoin.
By adding a social element through hosting competitions and rewarding skilled traders with prizes, exchanges are realising the future of cryptocurrency trading. A few examples include Interdax, FTX and CoinFLEX. Trading battles welcome traders of every skill level and gives flexibility to players to trade how they want to.
Just as eSports has enabled gamers to realise new opportunities, there’s four reasons why battles will be part of the future for crypto-trading.
1. Earn More
The first reason is that successful traders can earn more bitcoin than by trading as they typically would.
There are two ways you can earn bitcoin in battles:
- The profit you make from trading, and
- The prizes for the most profitable traders in a competition.
If you are amongst the traders with the highest profit at the end of a battle, you win a bitcoin prize.
(Disclaimer: The author is the Content Manager at InterDax)
2. As Motivation for Self Improvement
Trading battles motivate traders to be their best.
Because you are ranked against other traders, competitions quantify your trading abilities. Given the time constraints, the extra pressure may be a catalyst for you to improve your trading performance.
(Disclaimer: The author is the Content Manager at InterDax)
There's also an element of strategy. You have to figure out the best response to what others are doing, figure out where bitcoin's price might be at the end of the competition. Will you hold one large position the entire time? Or make many smaller trades reacting to other traders and market movements?
The important thing is that you can win using any strategy you want, whether that be scalping, swing trading or even strategic HODLing. You can also use battles to refine your own strategies or test out a new one.
This is all part of Game Theory. Trading is another game when you look at the world through this lense. It all involves working out your best responses to what other players will do and identifying the optimal strategy.
Battles can also motivate you to improve your trading style, as you’ll see what’s possible when you compete with others. When you’ve witnessed someone earn a ridiculously high return on equity percentage or even if you’ve won a prize, you’re encouraged to improve your trading style and learn from the experience.
3. The Social Element
Battles incorporate a strong social aspect: you compete with others, or you can even watch from the sidelines. We’re betting that battles will create a community of traders around the platform.
The Battle Arena is a meeting place for traders and enhances the trading experience - a bit like how Fortnite has become a popular virtual hang-out spot for kids. We envision the battle arena as becoming a vibrant virtual meeting place for traders.
There’s also an element of skin in the game. You need to put your money where your mouth is. Not only is there a prize at stake - but also reputations and bragging rights.
4. Have Fun
Having fun when trading is suggested to be a key quality of profitable traders.
In his book Trading Chaos, Bill Williams explains that your own individual belief system will determine what mindset you are in. These 'programs' are self-preservation, greed, confident trading and finally have fun. We can easily slip in and out of these different states of mind.
According to evidence presented in the book, a minority of traders (5%-10%) are in the ‘have fun’ mindset on any given day. If you are in the self-reservation (AKA fear) or greed state of mind, you will have difficulty dealing with getting stopped out of a trade or changing your opinion on the market.
But, having fun means that you are supported by (and in sync with) the market: it is easy to change an opinion or position in the market.
As Williams states in his book:
“Trading is much more like riding a bicycle or dancing than taking a math test. When you go dancing, you don't rush across the floor to see how soon you can get there. You are there for the enjoyment and pleasure of living at that moment.”
You never know what the market will do next - this is even more thrilling when traders are neck and neck in terms of profit when the end of a battle is approaching. Battles therefore amplify the enjoyment and excitement of trading cryptocurrency.
Challenge Your Trading
With continued maturation of the cryptocurrency market and new products being introduced, social trading and competitions are the next frontier for exchanges. Trading battles are commanding much more attention, as the gamification of cryptocurrency trading opens up new possibilities.
Our aim is different in that we want our battle arena to be the virtual space for traders to challenge each other and prove their worth, with battles happening all the time. After developing the platform for 18 months, we launched the mainnet in November 2019 and have hosted over 100 trading battles since then. (Disclaimer: The author is the Content Manager at InterDax)
Trading battles brings different people together and challenges the notion of who or what a trader is. In the same way that Fortnite brought new people into gaming (and re-ignited the interest of old gamers), battles make trading more exciting and attract new participants.
Much more functionality planned as we come out of the beta stage, the prizes will become larger and the battles will continue to evolve as the community grows. Some exciting features are coming in 2020, so stay tuned.
Join our battle arena here to challenge your trading.
(Disclaimer: The author is the Content Manager at InterDax)
Image by LMoonlight from Pixabay