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Crypto Addiction. Is It for real?

CryptocurrencySep 22, 2021 09:31AM ET
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Crypto Addiction. Is It for real?

  • Crypto trading is a new and more intensified form of day-trading addiction
  • Cryptocurrencies may appeal to gamblers who show severe signs of gambling dependency.
  • The 24/7 market opening can generate mental health issues as well as societal alienation.

Money used to grow on trees, but now money grows online and is closely tied to the value and volatility level of Bitcoin. The leading cryptocurrency is appealing to investors precisely because of its heightened volatility. However, the same fluctuations can damage anyone actively involved in buying, selling, or day-trading crypto as it brings a new dynamic to finance. Crypto addiction is not a well researched phenomenon but communities have started to acknowledge the unseen dangers.

Crypto Is 24/7

Anthony Robbins, said “consistency is key” because it helps develop habits. What’s unknown is the fact that not all habits are normal or healthy, which leads to the creation of unhealthy behaviors. In a thread, Reddit user, Far-Pie-4360 advanced the idea that crypto addiction is an ever growing reality that gets minimum attention. He states:

"Crypto has taken over my life. It is like an addiction. I do not get the shaking, sweating, and hallucinations. But I definitely feel anxious, worried, nervous, and always battling with a serious case of FOMO." Several factors are catalyzing constituents that explain the addictive responses encountered by individuals or experienced traders.

Riccardo Guglielmo, a Ph.D. professor in the Department of Geriatrics, Neuroscience and Orthopedics, at the Catholic University in Rome, Italy notes that brokerage platforms, including crypto platforms, have implemented gamification processes to “resemble those of video games,” which are accompanied by flashy colors. Video games have also been known for addictive behaviors, as they create habits and rewards that trigger more involvement from the user.

Additionally, stock markets are opened in a definite time frame, giving traders time to relax, unwind, and not be 100% focused solely on the candlesticks. Despite their daily timeframe, day trading addiction has already been accounted for since 2000. In contrast, crypto markets operate on a 24/7 schedule, which gives people no time to unwind. A Reddit user, Sakata32, notes:

"At least markets close forcing people to get some break. Crypto being 24/7 is an addict's dream.” A maxim amongst crypto investors says that “You can tell how much someone has invested in Bitcoin by how often they check their phone” because price fluctuations can rapidly increase or decrease an investor’s dopamine levels. Thus, constant interaction with the crypto market leads to a “distorted or pathological phenomenon” of addiction as users are triggered by rewards and reinforcements to conduct a particular action.

On The Flipside

  • Trading stocks has the same addictive connotations as cryptocurrencies, although financial rewards are lower.
  • Trading dependency and addiction can be decreased by gaining more knowledge and market understanding.

Speculative Trading is Dangerous

Because cryptocurrencies operate in an unregulated field, regulatory bodies and laws have not yet been developed to help mitigate investors’ and individuals’ risks. Lack of financial literacy is one risk factor for investors. Moreover, trading cryptocurrencies expands towards those with gambling predispositions or addictive personalities.

Devin J shows that trading high-risk stock or cryptocurrencies appeals to those with gambling personalities and leads to greater “gambling severity.” Some traders are better off not engaging with crypto trading as it can lead to even greater financial losses fueled by their personal relationship with gambling.

Journalist Matt Danzico created a visual representation of how crypto trading addiction has taken over the world as people became glued to their laptops amidst the 2020 global pandemic. He notes that regardless of the number of losses or gains, “anxiety and excitement feels the same.”

An excessive adrenaline rush fueled by FOMO is harmful to someone’s emotional state as it interferes with their rational way of thinking. That is why crypto trading or stock trading is often associated with gambling addiction. For cryptocurrencies, where financial rewards are higher, crypto poses an increased risk for anyone ill-equipped to handle price drops, parabolic rallies, and a rollercoaster of emotions because it leads to pathological trading behavior. And according to Riccardo Guglielmo, pathological trading or online trading of any sort has “negative financial and psychosocial consequences” because it can spiral into a string of bad financial decisions.

Why You Should Care?

The online environment is not a welcoming space, and even traders and individuals with a lot of experience can be absorbed into the mirage of high financial rewards. That is why trading and following the crypto market should be accounted for to minimize investment risks.

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Crypto Addiction. Is It for real?
 

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