Published on: February 2, 2026, 05:00h.
Updated on: February 1, 2026, 08:48h.
- Emergence of high-risk markets may be diverting focus from Bitcoin
- Growing appetite for quick rewards is attracting bettors and traders to riskier markets
- Numerous cryptocurrency investors were initially interested in sports betting and prediction markets
Even with favorable conditions under the Trump Administration and various macroeconomic indicators supporting its growth, Bitcoin experienced a decline of nearly 12% over the week closing February 1. As of late Sunday, the premier cryptocurrency by market cap needed to rise by almost $50,000 to reach its peak value again.
Experts suggest that a significant issue for Bitcoin stems from younger market players’ growing desire for quick profits, which prompts them to seek out markets with immediate rewards like prediction markets and sports betting.
“In the last 5 to 10 years, the influx of speculative markets has significantly increased,” remarks Greg Cipolaro from NYDIG. “This growth includes online sports betting, casino gambling, in-game live wagering, leveraged single-stock ETFs, ultra-short-dated options, and prediction markets—all influenced by market demand and regulatory shifts.”
In simpler terms, while Bitcoin is increasingly recognized as a legitimate asset class within the professional investment community, it faces stiff competition for attention from retail investors, many of whom are engaged in sports betting and, more recently, in prediction markets.
Bitcoin’s New Competition
Contrary to what some market analysts may think, Bitcoin now contends with rivals like iGaming, prediction markets, and sports betting, amidst dwindling attention spans and reduced capital availability.
Despite its recent downturn, Bitcoin was valued over $77,000 late Sunday, making it a challenge for most retail traders to acquire even one full coin. Conversely, for a fraction of that investment, they can find immediate engagement through event contracts, online gambling, or sports betting, catering to the instant gratification that many younger retail traders seek.
“This shift in financial markets is evident with the increased involvement in activities mentioned earlier, alongside meme stock trading, retail options trading, communities like WallStreetBets, and even billion-dollar lottery entries,” Cipolaro adds. “Although these activities vary in form, they often share a common payoff structure: limited downside for each attempt, low likelihood of success, and highly disproportionate potential gains.”
He further explains that faster-moving markets tend to favor immediacy while penalizing patience. This trend poses challenges for Bitcoin because, as the asset has matured, its significant returns are typically realized over extended holding durations measured in months and years.
Challenges Facing Bitcoin
Evidence shows most retail gamblers and traders tend to incur losses in prediction markets, sports betting, and zero-dated options. However, as Cipolaro from NYDIG points out, these market players are drawn to the “swift reinforcement” and immediate outcomes that such platforms offer.
This trend raises concerns about the growing blur between investment and gambling, suggesting that traditional investing is becoming more gamified, ultimately undermining the interests of retail investors. Bitcoin is potentially getting swept up in this pursuit of instant rewards.
“In financial markets, these dynamics put assets like Bitcoin— which, despite being amenable to frequent trading, are better suited for long-term holding—at a disadvantage,” concludes Cipolaro. “With increasing attention and capital shifting towards quicker, more reactive markets, slowly evolving investment strategies struggle to capture focus, even if their long-term return potential remains consistent.”