The cryptocurrency market constantly finds new formats and new ideas, and 2020 is full of crypto trading tournaments.
Some tournaments are organized in the demo mode to provide a safe environment to learn and compete with others, others are marketed as fundraising events and some bring in teams together or suit even professional traders. There are prize pools for all tastes: from thousands to hundreds.
Let’s dive into reasons to participate in such tournaments.
Reason #1 Practice before the big game
Trading might seem a very complicated task which becomes gambling without necessary knowledge and self-discipline. While some have a little amount to gamble, others have no such opportunity or prefer to examine the waters before jumping in.
For such users, crypto exchanges offer demo trading competitions where no deposits are required. Participants enter the competition and receive a certain amount of tokens for portfolio creation and trading. The traders with the highest profit win real bitcoins or other cryptocurrencies, depending on the platform.
Such tournaments are totally risk-free and can be held daily or over a period of several months. In March, FXOpen held the tournament dubbed “Cryptomania”. The first winner get over $1000. Some exchanges also offer such tournaments in the demo mode of their trading platforms.
But there is a little catch. Some tournaments, like the “Cryptomania”, allow withdrawing only a certain amount of the tournament prize. Other crypto exchanges place a time limit for the funds’ withdrawal. A certain amount on the particular exchange wallet increases the chances that the winner, who after all had proven his trading skills, might want to return to this platform.
In marketing, it is called a lock-in effect and it works the same in the traditional and crypto industry. Once the customer has a cost of leaving, the customer retention goes up.
Nevertheless, risk-free tournaments are still a good way to practice trading for novices, to gain enough confidence, practical knowledge and psychological discipline to actually trade real cryptocurrencies in an open market.
Reason #2 Assist charities with fundraising
The cryptocurrency market is in its early stages and does not have yet sustainable practices of corporate social responsibility. Nevertheless, the arguments towards giving back start to pop up among crypto exchanges. In 2019, Ben Zhou, the CEO of the exchange Bybit, shared the sentiment of giving back in his announcement of the game contest in cooperation with Save the Children organization.
One might argue that crypto trading simulation games platforms and cryptocurrency exchanges, team up with charity foundations and organize some sort of contests as fundraising events just to lure more traders and win over in tough competition.
Yet charity-centred tournaments seem to benefit all parties: charity foundations get more funds to fulfill their missions, crypto exchanges and gaming platforms attract users that later can pay for commissions and services later, and participants have a chance to learn and trade with a free ticket or micro-donations and assist the charities with fundraising.
For example, last year the crypto trading simulation game platform Altcoin Fantasy and DataDash held the Charity Trading Competition together with 4 organizations: Ocean Conservancy that works on protecting the ocean from today’s greatest global challenges, Shriners Hospitals for Children focused on the specialized paediatric care, Trees for Future that has already planted over 187 million trees, and the platform Binance Charity.
The high amount of participants makes such competitions quite hard to win, but most often there is a zero entrance barrier.
Reason #3 Build a team and have fun
For market participants with passionate friends and colleagues, there are team tournaments. Both novices and professional traders enter such competitions to have fun and show peers some team spirit. While winning alone is great, the feeling of winning with a team brings a whole new level of excitement.
Moreover, this type of fun usually does not cost much. For example, the minimum balance at the Team Profit Tournament on Binance Futures was just 10 USDT, while only the daily wins could bring the cryptocurrencies with a value over $2000.
For the exchange, it is also a great way to bring in new customers. For example, the Binance Futures announced the additional lucrative bonus for the top 20 largest teams. This way some participants not only test the platform and associate trading with fun but also advertise the exchange to all their friends. In terms of marketing, it is a form of the referral program with minimum costs.
Reason #4 Hit the jackpot
If the sums below $10,000 do not seem exciting enough, the biggest exchanges regularly hold tournaments with prizes of the jackpot level. For example, on Binance the prize pool could be $1,000,000.
Needless to say, the competition there is fierce. The biggest crypto exchanges have more tools for the effective marketing campaign for the upcoming tournament, while the huge scale of such events helps to spread the word.
For example, the news about the $2,000,000 prize pool of the tournament on the cryptocurrency gaming portal Bitcoin Games sounds serious enough to go through the trouble.
Yet jackpots and winning the lottery is extremely rare. Even buying a lottery ticket daily does not drastically increase the chances to win the national lottery. The same is true with the most crowded crypto tournaments. Statistically, the more the competition, the fewer chances every participant has.
Reason #5 Increase your earnings in regular tournaments
Few professional traders believe in miracles, but many see the opportunities to earn extra little by little that others might ignore. Cryptocurrencies had a rocket growth rate, and some still have. But there is always a chance to improve earnings a bit in regular tournaments.
Such tournaments are organized mostly on customer-centric crypto exchanges like Nominex that strive to make trading as fun and transparent as possible.
The Nominex customers with the balance over 500 USDT enter the tournaments where daily prizes go up to 100 USDT with additional bonuses in NMX. This way actual traders operating on their real accounts enter the competition not to win a jackpot but to gain extra percentages for their portfolio’s return on investment.
In regular tournaments in such exchanges, the chances to win extra are far more real than winning the jackpot, and yet there is no need to dedicate extra time to the participation. Traders just do what they do every day but earn extra in their best days.
All in one, the cryptocurrency trading tournaments vary enough to interest various market participants: from complete novices who test the waters before jumping into trading and gamblers for the big lottery, to professional traders and even those who would like to support charities.
After all, the traditional financial market also attracts tournaments’ organizers. For example, in 2020 the World Cup Trading Championships organized the championship of Futures and Forex trading.
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