The mental game leak poker players have with Bitcoin

Jared Tendler is concerned that poker players are putting too much of their bankrolls into Cryptocurrency without understanding it.

Poker coach Jared Tendler
Jared Tendler

The rise of Cryptocurrency in the poker world has been particularly interesting to me because most of my clients these days are poker players or professional traders. The mental game issues poker players and traders face are incredibly similar, which is why The Mental Game of Poker has actually enjoyed a bit of a cult following in the trading world.

Clearly Bitcoin is going to be big in poker and the world at large, I even accept it as a payment method for my books and coaching services. While the advice I give to traders almost certainly applies to Crypto investors, I wanted to take some time out to bring up a mental game concern I have for poker players caught by the Crypto bug.

The Dunning-Krueger effect

bitcoin crash
Could the poker community handle a Bitcoin crash?

Because professional poker players have a serious amount of skill and are good at dealing with uncertainty, I fear that many of them are overestimating the skill they have as Crypto investors. If you are just having a bit of a fun gamble with Bitcoin, because you think it is the future of currency, and you can stand losing a majority if not all of your investment, feel free to stop reading now. However, if you have a significant portion of your bankroll or net worth invested in it, which would hurt you if you lost it, please at least consider these two patterns I often see in poker players:

  1. It’s easy to assume their skill in poker automatically makes them good in other forms of “gambling”, like sports betting, daily fantasy sports, or trading and investing.
  2. It’s hard for good players to admit their bad at something that requires the same types of skills as poker, which sports betting, DFS, and trading and investing do.

The similarities between poker and these areas make a poker player more likely to be successful than the general public, but there is still a significant learning curve to become skilled. What would you think of a trader or sports better who thought it would be easy to make money in a $5/$10 cash game? You’d think they were a fish.

So when it comes to investing in Cryptos, ask yourself how much do you really understand about this rapidly growing industry? Or about trading?

I fear some poker players have a cognitive bias called the Dunning-Krueger Effect, whereby those who are so unskilled in something, they can’t spot their weaknesses, and falsely assume they’re actually good at it. Think back to when you first started playing poker, you were the fish, but when you won assumed it was because you knew what you were doing. Looking back on it now, it’s obvious how bad you were. How similar is your early Crypto investing?

Would a crash be another Black Friday?

black friday poker
Did we learn the Bankroll lessons from Black Friday?

I’m not here to shit on Bitcoin. I am excited by it. But I see a lot of players who appear to have a lot tied up in Cryptocurrencies who don’t seem to have done much due diligence. Or understand the unique complexities of trading and investing. Their decisions seem motivated more by a ‘fear of missing out’ and potential of losing out on large sums of money.

I remember how devastating Black Friday was for the poker community, in part because many players kept way too much money in their poker accounts. I fear that if Bitcoin crashed, the shock would ripple through the poker community and cause a lot of pain.

Many poker players have the potential to be good investors or active traders, but trading is far more complex than poker (at least in the sense that it is not confined to a set of in-game rules). Don’t just passively sit there while it feels like you are ‘printing money’, keep expanding your understanding of the investing, trading and technology side of Crypto. Respect the skills needed to actually be good at it, your poker skills don’t automatically transfer.

Do you think the poker community is mentally unprepared to become Bitcoin investors? Let us know in the comments:

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Comments (5)

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  • IronPumper


    Good article and helpful points^^

    But regards to the required skill-level I do agree 100% referring to "active Trading", but I disagree regards to "passive investing".

    Active trading requires as far as I know an infinte amount of skill and is similar as poker a neverending process -> I can see that the Dunning-Krueger effect can hit many people.
    Without a lot of years in experience into trading, in my personal view you should not get into active trading within crypto... esxpecially under the background that soon more and more "big players' will join and things will get more competitive.

    This said,
    regards to passive investing, the level of required skill is commonly estimated as being very very limited tbh.

    SoI would argue that in fact many poker-players bring the limited required skill (mostly mindset-realted and almost no technical skill needed) into investing to the table, but only very few do so regards to "active trading".

    It would have been even a better article, if you would have pointed out the big differences between those 2 "worlds" out - but still a good read and I agree with most aspects - thank you:)
  • Damlqv


    I have heard many seemingly crazy estimates of what price bitcoin can rgo to, both very low and very high. I have heard very few good reasons behind any estimate.
    If poker players are piling money into Bitcoin because they are afraid to miss out on huge returns, well they already missed out on what is likely to be one of the best investment opportunities we will ever see.
    That is a very poor mindset to bring to any decision you should base on logic, so in short I will say no, many poker players are clearly not equipped mentally to handle investing in Bitcoin.
    To have the same return next year Bitcoin will have to hit 275.000usd.
    I am not saying Bitcoin is a bad choice, but before investing ,you should understand what you are buying into, no matter what asset class you choose.
  • ZeroDegrees


    Don't get involved with bitcoin, safer to draw to an idiot straight on a 2-suited turn
  • Tim128


    I keep my BR in pennystocks
  • anduke


    I think the risk group isn't only poker players right now. This crazy hype is spreading like wild-fire.