How Bitcoin’s ups and downs are changing the way you bet

Abstract

We investigate the relationship between Bitcoin price fluctuations and gambling behavior on the blockchain-based LuckyBit platform. Using transaction data spanning four years, we analyze how Bitcoin’s exchange rate, price movements and volatility impact key gambling metrics, including bet size, gambling frequency, and risk appetite. Employing regression models and clustering techniques, we identify distinct behavioral responses among different gambler cohorts. Our findings reveal that higher Bitcoin price levels are associated with increased risk-taking but reduced gambling frequency, whereas higher weekly price volatility leads to a significant reduction in average bet sizes across all player groups. These results suggest that gamblers perceive Bitcoin’s price movements as a psychological reference point, influencing their betting decisions in a manner similar to traditional financial decision-making.