Thursday, December 23, 2021

Poker and Crypto and House Money

Interesting article on the similarities between the poker boom and the crypto explosion and how "the house money effect" comes into play.

"The house money effect is a theory used to explain the tendency of investors to take greater risk when reinvesting profit earned through investing than they would when investing  their savings or wages."

Can attest that this is 100% true. When playing poker with my buddies - if I'm up I often go into ATC (any two cards) mode. I know it's technically bad poker but it also makes me unpredictable. For me it adds an extra level of enjoyment maybe because of the risk of playing bad hands (including "the hammer" - 7-2 off-suit). 

It would be interesting to look back on some of those grinders who became online poker millionaires and how they are doing financially today. It should also be noted that the federal government ended the online poker boom through legislation known as Black Friday in the poker world. Could there be a Black Friday coming in the crypto world? And are people prepared for it?

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