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The hype is real when it comes to cryptocurrency trading. Very modern mythology has gathered around the industry – think of the “blockchain bros” boasting on social media of amassing instant fortunes, posting edgy memes, living apparent rock star lifestyles and, of course, driving those ever-present “Lambos” that quickly became a cliché of the whole crypto “scene”.
The reality of trading isn’t quite as much of a fairy tale, of course, and there’s been increasing concern over the convergence of crypto trading with online gambling.
In 2019, a landmark study by the Center of Gambling Studies at Rutgers School of Social Work uncovered disconcerting evidence of a significant link between problem gambling and frequent crypto trading.
Touted as the first study to analyze this kind of obsessive, high-risk behavior convergence between traders and gamblers, it found that more than 50% of regular gamblers – that is to say, people who gamble monthly at the very least – have indulged in cryptocurrency trading over the past year.
“For some people, trading cryptocurrency is seen as an investment opportunity,” the study’s lead author Devin Mills conceded. However, he also said “there is an alarming proportion of people who are ‘gambling’ on these cryptocurrency markets as they would gamble on horses or sports or slots. And it has the potential to get them into significant trouble.”
This potential for “trouble” is thought to be exacerbated by the fact that, unlike online gambling on licensed sites, crypto trading is unregulated and anonymous, with no tabs or caps imposed on traders.
This can cause the behavior to run out of control, as traders and spread betters can carry on doing their own thing until the money runs out (and beyond).
It tells us something that Castle Craig Hospital in Scotland, a drug and alcohol rehabilitation centre, is now actually providing specialized treatment specifically for traders who’ve developed an addiction to the markets.
The emphasis is not only on trading but also on spread betting – ie when speculators try to predict whether the market will rise or fall. Researching the extent of the problem for Castle Craig Hospital, writer Rupert Wolfe Murray posted some of the conversations he had with traders on Reddit, and some of the tales pack an emotional punch.
One trader admitted he was having trouble paying his bills, and said “Oh man, if the crypto market was doing better, it would have a very positive impact but right now I’m way off the reservation. This is not normal. 20 hours a day staring at these markets.”
Traders spoke of the addictive quality of watching the markets move, with one using the word “mesmeric” to describe the irresistible compulsion to keep watching the peaks and troughs.
A former gambling addict called Tony Marini, who now works as a therapist for others in that predicament, has said that, for many, crypto trading is a “way for people to escape from themselves, into another world, because they don’t like the world they’re in.”
Unsurprisingly, these kinds of ominous or at least negative connotations have rubbed some professional traders up the wrong way. Manav Singhal, CEO of blockchain startup Velix.ID, has bluntly spoken out about trading in the face of losses.
“I think profits and losses are just a part of the trading, and it is no different than trading any other kinds of securities,” he told TheNextWeb. “Gambling addicts… can choose any addiction they want, and it can be cryptocurrencies, but that doesn’t mean that a majority of cryptocurrency traders are addicts.”
Still, while it almost goes without saying that millions of people are trading in a healthy, controlled fashion, going about their business in a way that suits their needs, it’s certain that the spotlight on the risks will intensify as currencies like Bitcoin become ever more ubiquitous.
Speaking to Motherboard back in 2018, therapist Chris Burn said that over the previous 12 months he’d personally seen a “big increase” in people seeking him out for treatment for crypto trading addiction.
Tellingly, he also said that in his experience it’s relatively rare for someone to be solely addicted to, say, Bitcoin trading. Rather, obsessive trading seems to go hand in hand with more general gambling addiction. This is often known as “cross-addiction”.
Speaking also to the BBC, Chris Burn said that “It is a kind of a bubble situation that is very exciting for people, particularly for compulsive gamblers, because excitement is a big part of any addiction. We see this as potentially large.”
Certainly, the hallmarks of “crypto addiction” are pretty much identical to the red flags for problem gambling. These can include:
- Spending excessive time glued to the screen and monitoring markets
- Chasing losses rather than taking breaks to regroup
- Spending beyond your means
- Always telling yourself a “big win” is right around the corner
- Lying to friends and family about how much you’re trading or speculating
- Experiencing mood swings, including feelings of depression and frustration
- Feeling restless and impatient when engaging in other daily activities
In a significant move that tells us a lot about the way the winds of change are blowing, gambling blocker app Gamban – designed for problem gamblers who want to block access to casinos and betting sites across all devices – announced very recently that it will expand its reach to cryptocurrency trading platforms.
For those who do fall into an unhealthy spiral of obsessive trading, therapists suggest existing protocols like cognitive behavioral therapy. The bottom line is that the rise of cryptocurrencies has been one of the fastest-growing and consequential phenomena of modern times – comparable to the culture-shifting significance of the rise of social media – so it stands to reason that societies across the world will need to reckon with the impact it will have, both good and bad.
It’ll be interesting to see what further measures may be taken, from blocks on trading sites for problem gamblers to increasing governmental crypto regulation in countries across the world.