It’s no secret that many high-profile players have been bullish on bitcoin and other coins after the last few years. Many players regularly post their crypto views and recommendations on Twitter and in other social media. With the industry now seeing some major setbacks, some players may be finding a sweat beyond the poker table.
Bitcoin alone has seen a drop from more than $47,000 at the end of May to around $23,000 in recent days. Ethereum reached more than $3,500 in early April and was around just over $1,600 this week.
Many in poker may be left scratching their heads and could see those types of losses affecting their bankrolls. Some players offering crypto advice may also rethink their positioning in the space.
Poker players tend to be more tolerant of risk than most, willing to gamble thousands of dollars with hopes of some nice payouts. For some, that seems to be evident when it comes to crypto as well. Boasting of crypto scores and investments have become a regular part of the poker landscape in recent years.
“This recent crypto downtrend has definitely hit the poker community hard,” four-time World Poker Tour champion Darren Elias says. “Naturally, poker players are less risk averse than your average investor, so many of them are very exposed to the swings of crypto. There are also different levels of exposure and risk within crypto where things which poker players are fond of, like leveraged trading and alt-coins/NFTs, have a much higher risk of ruin than simply holding bitcoin or ethereum.
“While I don’t see this recent down trend affecting the smaller buy-in large field events, it will be interesting to see if it affects the high roller field sizes.”
Beyond the price drops, the industry has seen some other concerning issues. The Wall Street Journal recently reported on the crash of cryptocurrency lender Celsius Network. The company worked similar to a bank, but promised higher yields than tran traditional banking. The company filed for bankruptcy and has left many locked out of withdrawing from their accounts.
“Many customers are now getting a hard lesson in an age-old markets maxim and a modern one: Reaching for yield usually comes with big risk,” the newspaper noted. “And the crypto market in particular is still little more than a casino, lacking the regulatory oversight and legal protections of banks and brokerages.”
Exchange issues bring poker concerns
The poker world hasn’t been shielded from similar events. Poker pro Doug Polk received plenty of criticism in July for his promotion of a crypto exchange . Polk regularly gives out coin advice and even hosted a YouTube channel dedicated to the industry.
Part of that included promoting and working as an ambassador for CoinFlex, a crypto trading platform. Like Celsius, the company suspended withdrawals on July 15, shutting many investors out of their accounts. Polk announced his resignation as an ambassador recently on his podcast, but received criticism for recommending the platform.
“On June 23, cryptocurrency exchange CoinFlex paused user withdrawals and stated they would have an update on the 27th and that hopefully withdrawals would begin by the 30th,” he noted on YouTube. “I resigned as global ambassador for CoinFlex on June 28 once I got everything squared away on the legal front.”
Polk said he was assured by the company that the exchange was fully collateralized and he said so in promoting the company. However, he later learned via Twitter that wasn’t the case.
“I simply had no idea and no one had given me any information,” he said. “At this point I became very concerned with the business, a business I might add that I had zero equity ownership in.”
Certainly investors are ultimately responsible for their own decisions with their money. However, some felt Polk passed himself off as an expert and argued that recent market fluctuations and the CoinFlex issues may offer some evidence against that.
Others argued that Polk would heavily criticize others caught in similar circumstances. CoinFlex began laying off employees this week. The recent crash of Celsius and other exchanges have “wiped out about $1 trillion in value,” the New York Times notes.
Crypto combat among poker player ambassadors
In defending himself on Twitter, Polk made further news by casting some criticism on Phil Hellmuth’s association with Bitcoin Latinum. Hellmuth promotes the company by wearing a company cap while playing in tournaments.
Bitcoin Latinum describes itself as a “next generation, insured asset-backed cryptocurrency.” The coin has fallen from over $10 in early June to a bit more than $4 this week.
People are coming after me like I'm the person at fault and/or this says something about my character. I stand by my decisions and I have done the right thing every step of the way. The difference between this and closing your eyes and wearing a bitcoin Latinum hat is tremendous.
— Doug Polk (@DougPolkVids) July 9, 2022
Hellmuth responded to the criticism and noted that his involvement was solely as an ambassador. He argued that he never gave advice on any crypto investments or anything about the industry.
“You made a big mistake (Doug Polk),” Hellmuth noted on Twitter. “Then, you try to ‘compare’ our involvement in the projects and throw shade at me? You are 100 times more at fault.
“I never told anyone to buy, ever, I believed in LTNM, but I knew it was risky. I have made ZERO: was paid coins only, sold zero.”
Poker player reactions to downturn
Could the crypto crash bring some changes in attitude among poker players as well as investors in general? That remains to be seen.
Many still believe in coins and remain bullish on the future of cryptocurrencies. Some bitcoin believers, known as maximalists or “maxis,” are scooping up the cryptocurrency at lower prices. However, they also argue that bitcoin itself supersedes other crypto coins and should be considered the only legitimate coin.
“The maxis continued buying Bitcoin even after its price plummeted to an 18-month low of roughly $20,000 in June,” the New York Times noted on Tuesday. “‘Bitcoin is simply ‘going on sale,’ they say. And, as the market has melted, they have embarked on a public-relations offensive, aiming to persuade investors and lawmakers that Bitcoin is different from the thousands of other digital currencies that proliferated in the last few years before tanking this spring.”
Which direction will those poker players who have been so involved with crypto over the last few years head? Poker player and investor Kane Kalas seems to have exited the market for now.
To everyone who has asked my opinion on crypto during WSOP to whom I’ve relayed that I’ve been happily short:
I exited my short position today. I currently have no position in crypto https://t.co/BWwNW8akHW
— Kane Kalas (@KaneKalas) July 12, 2022
Hindsight is certainly 20/20, but poker player and businessman Tony G also recently noted that he warned against holding crypto several months ago. He took issue with the growing accumulation of coins on the market.
6 months back I mentioned to be out of crypto to all my fans. Getting bored now being short the market. I guess soon we can start nibbling again. Important to kill all the riff raff, before we commence accumulated positions. Many weak hands were pumping shit coins, 😉pain
— Tony G (@TonyGuoga) July 3, 2022
Another poker pro, who asked to remain anonymous, may speak for some players about the current situation. Lower prices may be seen as an opportunity.
“At some points of life I wish I did (have more in Bitcoin) and at some points of life I’m glad I didn’t,” he said. “I’ll probably wait for it to crash and burn completely this time, and then buy some up for the next go-around.”