Since nowadays, most people consider themselves entrepreneurs, talking about investing has become a trend. We always see special ‘Gurus’ that promise you huge gains on your investments, or a financial plan that will retire you by the age of 30.
In most cases, things don’t go to plan and there is a good reason for that.
First things first, nobody can predict the market. Whether we are talking about stocks, bonds or cryptocurrencies. We can observe historical data and guess where the market would be heading, but it almost always takes an unexpected turn.
This is where horse racing and investing in Bitcoin or stocks come together. The cryptocurrency market can be impacted by many different variables. From Tweets from popular people like Elon Must, to rumors about SEC approving Bitcoin Spot ETF, the market goes up, down, sideways quite fast.
This means that it is unpredictable.
The same goes for horse racing. Horse racing is a sport where same as the crypto market, many factors come into play. We have the horse’s mood, weather conditions, diet, training, competition and much more.
So, even though they might look like two distant worlds, they have a lot in common.
But which one is more profitable?
Let’s find out.
Investing in Horse Racing
Horse racing as a sport can be split into many different categories. Depending on your passion, investing goals, or expected returns you can choose whether to enter the breeding business, training business, buying a racehorse, become a shareholder, betting and many different options.
Even though investing in horse racing requires a lot of money, you can still become a bettor and try to predict the winner of a race. Nonetheless, before you do that, make sure you know all the ins and outs of horse racing betting. Click here to find out more.
But in this article, we will focus on owning a racehorse, or part of it.
There are a couple of different ways that racehorse owners make money, such as:
- Winning races
- Sponsorships
- Breeding rights
- Advertising
Even though most people would consider that the biggest money would be made winning races, it is not always true. Just because you see a huge prize purse, it doesn’t mean that all the money goes to the racehorse owner.
The winning horse in most cases takes around 60% of the race prize purse. After that, the trainer and jockey each get a 10% cut. Plus, the owner needs to pay an entry fee, and the cost of preparing the horse.
So, if the race’s prize purse is $20,000, the owner of the horse that won the race would realistically get around $5-7.000, after paying all the expenses and cuts.
On top of that, winning isn’t easy, and unlike human athletes, they have a much shorter career where an injury can change everything.
Additionally, there are a lot of costs owning a horse. Things like building a stable, transportation, feeding, vet checks, training and more will take a significant portion of your budget. On average, a Thoroughbred horse will cost you from $40,000-$60,000 per year.
This means that you need to win around $120,000 in prize purses just to break even.
But it not all bad news for racehorse owners. They can make a lot of money from selling breeding rights, and through sponsorship deals.
Do you remember American Pharoah? The Triple Crown champions?
Well, the owner sold its breeding rights for staggering $23.5 million dollars few years after the race.
Investing in Cryptocurrencies
If you are familiar with cryptocurrencies, then you already know what a wild ride it has been over the last couple of years. The most popular cryptocurrency Bitcoin reached almost $70,000 after collapsing to $15,000 quite fast.
But it seems like the cryptocurrency world is slowly stabilizing and we are seeing some new movements that might bring additional value to the investors.
2024 started on a positive note for not just Bitcoin but all cryptocurrencies. We have the SEC approval of Bitcoin Spot ETF, which is a big thing. This change will allow a lot of organizational money into the process and companies would get a chance to own cryptocurrency without investing directly.
Why wouldn’t invest directly? Well, most of them are scared since the cryptocurrency world is not regulated by the authorities, and they might get in trouble.
Additionally, the SEC approval shines a light on crypto regulations.
Moving forward to April, and we have Bitcoin halving, which historically, has proven that increases the prize of this cryptocurrency.
So, 2024 seems like it is going to be a good year for cryptocurrencies. But before you jump in and invest your money, remember these are all speculations, and investing in cryptocurrencies comes with many risks. After all, we mentioned that most of the cryptos lost 60-70% of their value in a course of a year.
Final Words
So, which is better? Investing into horse racing or cryptocurrencies?
Well, investing isn’t only about making money, it is also about following your passion and what you are interested in. The process is simple, if you are interested in the topic, there is a better chance that you’d make wiser investing decisions.
So, if you like horse racing, stick to horse racing, and if you are interested in cryptocurrencies, you should consider all the pros and cons before investing.
Remember, this is not a financial advice and you need to do your own research before you invest in anything.
