Crypto can make you a lot of money. That’s the headline we’re all too aware of. A bitcoin was worth around seven pence in October 2010, now one bitcoin is worth around £36,900. So if you put a tenner on bitcoin back then and didn’t touch it, you’d have roughly 3.7 million quid now, and that’s without compound interest. This is the blockchain dream.
Thing is, you didn’t, did you? Nor did you hit the dogecoin boom of that week in April 2021, where the coin shot up 400%, only to come crashing (relatively) down. Landing the huge returns is rare, and usually a long-term result. And that’s just half the game. The other half is selling up at the right time. Most people who have had crypto for the last year or so have probably seen higher profits in their wallets than their current balance. Realistically, as with anything else, huge gains in a short space of time hardly ever happen.
What is crypto addiction?
Being addicted to investing in cryptocurrency starts with temptation. Initially, it’s usually low-stakes, a bit of disposable cash, and the luring potential of high gains. You deposit funds, the eye-watering volatile swings begin, for better or worse, which are constantly in flux. The endless new altcoins and tokens offering weird and wonderful functions allow hope and autonomy to decide which new coin could become the next big thing, and to take a punt on it (AKA a moonshot). It starts with a tenner, which turns into fifty quid. Then you think, fuck that’d have been half a grand if I put a hundred in. So next time you do that. And then, another, and another until four-figure sums pop up in your wallet. Ace. The buzz. The thrill of it. Let’s go for five figures. And then suddenly, Elon Musk’s done a tweet, an investigation proves the coin is bad for the planet, or you’re scammed, to name just a few risks – and in an instant, you’re worse off than where you started.
There’s a big red arrow. But you can’t stop. You’ve seen the highs: for every loss, there’s a gain. So you find a new coin and repeat.
Those who were looking for alternative ways to make money during the pandemic turned to crypto trading. As a result, Castle Craig (a private residential rehab clinic) started offering treatment for cryptocurrency addiction last year. Speaking to the clinic, Dr Mark Griffiths, professor of behavioural addiction at Nottingham Trent University said that “addiction to cryptocurrencies is really just a sub-type of online day-trading addiction.”
What are the symptoms of cryptocurrency addiction?
Trading crypto adds other issues, like sleep (or a lack thereof) and general neglect for yourself and those around you. Where there’s WiFi, there are numbers to chase. And the market doesn’t sleep – this is a global currency, it won’t be contained to time zones, a 9 – 5, a weekday. When you’re constantly looking at the numbers, buying a dip, selling when it feels good, you can go through dozens of transactions a day. Micro-hits of profit and loss constantly. Bigger dopamine hits each time you deposit a bit more cash. Social life dwindles, transactions become very hard to keep track of, punts get larger. Of course, it can go up and up, but it’s more likely to go down and down. Then, too often you can find yourself pulling days-long stints trying to recover your losses. It’s traditional stocks on steroids. It’s also increasingly being considered as a form of gambling addiction, or at least very similar.
For every Wolf of Wall Street-style story, there’s a story of addiction, of lives being turned upside down, of hundreds and thousands of pounds being lost, and of ruin. So let’s take a second to think about how we’re doing, and how our mates are doing. Whether we’re in the green or the red. Given how crypto is fairly new, there’s not masses of statistics, or even resources around when it comes to addiction. But there is for investment and gambling, so ideas can be applied laterally.
How can I avoid becoming addicted to crypto?
It’s worth assessing your financial situation honestly. As often said across this column, you should only ever invest what you can afford to lose. If something happened, and you lost all your crypto, would it significantly affect your life? If it would, it might be time to rein it in. Try making a point of putting money into a savings account – where it’s traceable and almost certainly won’t go down in value.
Where to get help
If you think you need to take a step back, there are a few options. From professional help, which can include live-in rehabilitation and cognitive behavioural therapy; to practising dry trades (trading without using real money) and self-setting limits on how much you deposit into your wallet. If you find you’re often breaking your own rules, there’s likely a problem that you need to address with the help of others. Some wallets, such as coinbase, do have deposit limits but they’re quite high, so you could also request them set you a custom limit. You should also really set a rule where if you get a serious profit in, you withdraw a good amount of it, so that you don’t lose it all if shit hits the fan.
Ultimately though, it’s best to try and spot the red flags before things spiral. As part of Castle Craig’s resources on addiction, it mentions thinking about when you usually look to invest or trade crypto. If it’s to elevate your mood, to kill time, or after consuming alcohol or other drugs, there could be the beginnings of an issue. Additionally, if you’re using money that you shouldn’t be (whether it’s money you’d generally use for food and bills, your savings, or even not your money) this could suggest that crypto is beginning to take over.
If these signs feel slightly relatable, or you notice them in someone else, having an honest chat and seeking resources can be the most valuable exchange you’ll make.
Speak to a Financial Conduct Authority registered financial adviser before taking financial advice, and think carefully before making any decision.