In the world of economics and finance, the term zero sum game is often used to describe a situation where one party’s gain always comes at the expense of another’s loss. This concept frequently appears in various forms of competition, including trading and investing.
However, when it comes to Bitcoin—a digital asset that is becoming increasingly popular and complex—an interesting question arises: Is Bitcoin (BTC) trading also a zero-sum game?
This article will take a deeper look at the meaning of a zero-sum game, how the concept applies to trading, and whether Bitcoin truly fits this definition or not. Let’s dive in!
What Is a Zero Sum Game?
A zero-sum game is a situation in which one person’s gain is exactly balanced by another person’s loss. In other words, a zero-sum scenario always produces a winner and a loser.
A simple example of a zero sum game is chess—when one player wins, the other must lose.
According to Investopedia, certain types of financial trading are also considered zero sum games. For instance, in options or futures trading, there are always two parties entering into a contract. If one party profits from the deal, the other party inevitably incurs a loss.
Is Bitcoin a Zero Sum Game?
The concept of Bitcoin as a zero-sum game is often misunderstood, especially by those who view Bitcoin purely as a short-term speculative asset. However, Bitcoin traded on the spot market is not a zero-sum game.
Over the past decade, Bitcoin has surged by millions of percent. For long-term investors, Bitcoin is not a zero-sum game because it shares characteristics with gold.
Even those who bought at peak prices—such as $20,000 during the 2017 bull run—may have seen losses for a few years, but many ultimately recovered their investments and earned substantial profits when Bitcoin hit new all-time highs of $69,000, more than 3.5 times their original entry point.
Moreover, when someone sells Bitcoin, it doesn’t automatically cause an equal and opposite loss to the buyer. This is a key reason why Bitcoin spot trading doesn’t qualify as a zero-sum game—both parties can potentially benefit.
For instance, during a market crash when many panic sell, those who sell early might be seen as the “winners.” Yet, those who buy at the bottom and patiently wait for the market to recover can achieve even greater gains. This highlights how skill, strategy, and risk management—rather than a fixed zero-sum structure—determine outcomes.
Why Bitcoin Is Not a Zero-Sum Game:
- Technological Adoption
Bitcoin is more than just a tradable asset—it serves as the foundation of a new financial infrastructure. With growing adoption, Bitcoin is enabling innovations like the Lightning Network, cross-border payments, and decentralized finance (DeFi), all of which generate real economic value.
Furthermore, Bitcoin ownership is no longer limited to retail investors; institutional players such as banks, governments, and investment firms are also entering the space.
- Ecosystem Growth
Bitcoin adoption is driving job creation, platform development, financial services, and educational opportunities. These macroeconomic effects foster a positive-sum ecosystem, where new participants can create wealth through innovation, not just speculation.
In summary, while certain types of financial instruments (like derivatives) may resemble zero-sum dynamics, Bitcoin in the broader sense—particularly in the spot market and through long-term adoption—represents a positive-sum environment that rewards innovation, patience, and strategic thinking.
Can Bitcoin Be Considered a Zero Sum Game?
If Bitcoin is viewed purely as a short-term trading instrument, it tends to exhibit the characteristics of a zero sum game. In such a scenario, one party’s gain directly comes from another party’s loss.
Price movements in the market are driven by buying and selling activity among participants. A trader profits when price changes work in their favor, while losses occur for those on the wrong side of the trade.
This zero-sum nature becomes even more apparent in derivative markets such as futures or margin trading. In these cases, there is no actual transfer of the underlying asset—only the difference in price is being traded. In other words, traders don’t directly own Bitcoin but speculate on its price movements.
In short-term trading and derivative markets, Bitcoin can indeed resemble a zero sum game. However, the broader Bitcoin trading ecosystem reflects two distinct realities:
- In short-term trading, especially within derivative instruments like futures and margin trades, Bitcoin behaves like a zero sum game, where one trader’s gain is exactly another’s loss.
- In long-term investment and broader adoption contexts, Bitcoin functions more as a positive-sum economic engine. Technological innovation, infrastructure development, and collaboration across the industry contribute to overall value creation—beyond mere wealth transfers between individuals.
Is Futures Trading a Zero Sum Game?
Futures trading is often considered a classic example of a zero sum game. In this type of trading, participants don’t actually buy the underlying asset—such as Bitcoin—but rather trade derivative contracts based on its price.
When a trader buys a futures contract, they are betting that the price will go up in the future. On the other hand, if a trader believes the price will go down, they will sell a futures contract. This setup naturally creates a win-lose scenario: for every profit made by one trader, there is an equal loss incurred by another.
Therefore, futures trading is fundamentally a zero sum game, where one party’s gain comes directly at the expense of the other.
Example of a Zero Sum Game in Crypto
Beyond conventional futures or options trading, buying crypto assets can also turn into a zero sum game under certain circumstances—such as during a rug pull involving meme coins.
For instance, there are over 300,000 ERC-20 tokens on the Ethereum (ETH) network alone. Among these tens of thousands of tokens, many are intentionally created to deceive investors. The typical strategy involves generating hype to attract buyers, only for the developers to later pull all the liquidity from decentralized exchanges (DEXs).
In these cases, the token developers walk away with all the profits, while investors lose their entire investment—resulting in total losses. This scenario clearly reflects a zero sum game: one side wins completely, while the other side loses everything.
What Is a Non Zero Sum Game?
In addition to the term zero sum game, there is also the concept of a non zero sum game. A non zero sum game refers to a situation where the outcome does not necessarily result in clear winners and losers. Instead, all participants can experience a net benefit or, in some cases, a net loss.
A good example of a non zero sum game is when competing crypto projects choose to collaborate in order to expand the overall market. For instance, Pendle frequently partners with other DeFi protocols, and Solana facilitates collaboration between its ecosystem projects and platforms like Hyperliquid.
In the crypto industry, the result of a non zero sum game can be either positive or negative—depending on the intentions and interactions of the participants. Strategic collaboration can lead to mutual growth and ecosystem expansion, while poorly managed partnerships can lead to systemic risks or inefficiencies.
Example of a Non-Zero-Sum Game in Crypto
Many crypto projects work together to build shared infrastructure, particularly through cross-chain integrations.
For example, Polkadot and Chainlink have collaborated in such a way that Polkadot benefits from Chainlink’s decentralized oracle services, while Chainlink extends its technological reach across networks. This kind of symbiotic relationship demonstrates how cooperation can create value for all parties involved—rather than redistributing existing value at another’s expense.
Conclusion
Overall, crypto trading can be a zero sum game, depending on the type of trading involved. For example, derivative trading—such as futures or margin trading—is generally considered a zero sum game because one party can only profit if another party takes a loss.
Interestingly, nearly 50% of trading volume on crypto exchanges comes from derivatives, which explains why many people perceive crypto trading as a whole to be a zero sum game.
However, when investors avoid leverage and focus on high-quality projects for long-term investment, the situation shifts toward a win-win outcome—where both sides can benefit and no one suffers a total loss.
References:
- Bayu Surya Purnama. Is Bitcoin a Zero-Sum Game? Here’s the Full Explanation. Accessed on July 21, 2025.
- Bitrue. Is Trading Bitcoin a Zero-Sum Game? Accessed on July 21, 2025.
- Investopedia. Zero-Sum Game Definition in Finance, With Examples. Accessed on July 21, 2025.
- Phemex. What is a Zero-Sum Game? The Truth about Crypto Trading. Accessed on July 21, 2025.