Cryptocurrencies such as Bitcoin and Ethereum have become household names in the last 10 years. What started out as a digital currency in which a few people dabbled has now become a worldwide phenomenon with banks, major corporations, and other financial institutions investing into it.
Since cryptocurrency debuted, the trading of the currency has become a popular activity by investors. These investors range from novice digital currency buyers using their smartphones to experienced Wall Street funds. However, unlike the trading off fiat currencies or stocks, cryptocurrency values rise and fall with seemingly more volatility.
Due to the nature in which a cryptocurrency can be valued at a lot of money one day and very little the next, it has led to some individuals becoming addicted to trading it.
Cryptocurrency addiction is a very real thing in the same way that Internet and videogame addictions are present in some individuals. The issue with cryptocurrency addiction is that it can lead to an individual investing and/or losing their entire life savings. Cryptocurrency addiction should be looked at more like gambling addiction11.L. Rennert, DSM-5 Gambling Disorder: Prevalence and Characteristics in a Substance Use Disorder Sample – PMC, PubMed Central (PMC).; Retrieved September 21, 2022, from https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4019046/ as it deals directly with a person’s finances.
Cryptocurrency Addiction Definition
A person with cryptocurrency addiction compulsively trades digital currencies online. Compulsive activities related to cryptocurrencies such as repeatedly checking the rise and fall of values and reading up on every tiny tidbit of digital currency news is also a part of the addiction.
Cryptocurrency addiction has been categorized as a behavioral addiction like gambling addiction. It can alter and disrupt the way a person lives their life. It can also destroy relationships and other life pursuits. Like Internet gambling, cryptocurrency and digital currency trading are new phenomenon. People are still discovering just what it is and how it works.
Who is at Risk of being Addicted to Cryptocurrencies?
Research has found that cryptocurrency addiction affects specific people. While addictions to drugs and alcohol maybe likely to occur in a variety of people, certain individuals can become addicted to buying, selling, and trading digital currencies. Cryptocurrency addiction is most often seen in males; however, it is believed this is only true due to fewer women currently dealing in cryptocurrencies.
Others who are potentially vulnerable to cryptocurrency addiction are young adults and teens. Due to young individuals being online often, cryptocurrency trading can start at a young age. Individuals with direct family members who deal in cryptocurrencies are also susceptible to being addicted to trading. In addition, people who are addicted to online gambling and the rush they feel from winning are likely to become cryptocurrency addicts.
Due to the average person being able to buy, sell, and trade cryptocurrencies, anyone can become addicted. The barriers and restrictions to participating in cryptocurrencies are low, and losing everything is a real possibility for even those who trade leisurely.
Signs of Cryptocurrency Addiction
Experts have discovered there are some telltale signs to individuals suffering from cryptocurrency addiction. These signs include:
- An individual spending a lot of time trading cryptocurrencies22.M. Arias-Oliva, Variables Influencing Cryptocurrency Use: A Technology Acceptance Model in Spain – PMC, PubMed Central (PMC).; Retrieved September 21, 2022, from https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6436067/, thinking about trading, and checking digital currency prices. These activities overcome their lives resulting in work, exercise, socializing, and other aspects of their daily lives not being completed.
- Increased debts and financial issues related to the loss of money incurred from trading cryptocurrencies.
- Lying to friends and family about activities or problems incurred by trading cryptocurrency.
- Hiding the amount of time spent online trading as well as the amount of money lost when digital currency devaluations occur.
- Rapid mood swings, depression, and low self-worth.
- Anxiety, tremors, sweats, and stomach issues due to feeling anxious.
- Unrealistic views on making money, being “lucky”, and believing it is time to win next.
- Chasing losses
- Reluctance to learn any new Bitcoin trading strategies
- Attempting to control cryptocurrency trading without any success.
One of the biggest issues with cryptocurrencies is that there are a lot of them online. There are somewhere between 1,500 and 3,000 cryptocurrencies available to buy, sell, and trade. Every day, a new cryptocurrency hits the Internet with many of the coins offered by online start-ups used to raise capital for investment. These cryptocurrencies can, in the end, be worthless. Yet, other cryptocurrencies can be worth a lot when cashed in for fiat currencies.
According to Philippa Gold, Clinical Director of Remedy Wellbeing, “previously, I would have described cryptos as ‘shares on steroids’; now I would say they’re shares with jetpacks and boosters and then some”.
The idea that shares of cryptocurrencies can explode in the matter of minutes making shareholders a large sum of money is held by many traders. However, with so many cryptocurrencies on the market, many that will never be worth the likes of Bitcoin and Ethereum, most traders will simply buy and sell without making significant amounts of money. Perhaps they will mostly incur losses in the end.
Effects of Cryptocurrency Trading Addiction
Financial problems are likely to be the biggest effect that traders experience. It is similar to what individuals with a gambling addiction possess but can be worse due to the amount of money that can be lost from buying shares33.M. Douglas, The Downward Spiral of Trading Addiction, Investopedia.; Retrieved September 21, 2022, from https://www.investopedia.com/articles/investing/071713/downward-spiral-trading-addiction.asp.
The effects of cryptocurrency addiction include:
- Inability to pay bills
- Borrowing money to stay afloat financially
- Accruing debts
- Pawning or selling personal items to pay debts or fuel the cryptocurrency addiction
- Losing a home through foreclosure or being evicted
- Having possessions such as a car repossessed
- Defaulting on monthly payments
- Committing illegal acts such as theft
- Committing embezzlement or fraud to finance cryptocurrency trading
- Declaring total bankruptcy
There are ways to improve a cryptocurrency addiction. Individuals should not see it as their primary way to make money. These can keep a person from chasing their losses. Traders that find themselves consumed by the activity should limit the amount of time they spend buying and selling crypto. In addition, the amount of money used to buy and sell digital currencies should be curbed.
Money can bring out the worst in people especially when a new phenomenon, such as cryptocurrency, makes it sound easy to become wealthy overnight. Cryptocurrency addiction is very real and help is available for those people that find themselves unable to stop trading.
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- 11.L. Rennert, DSM-5 Gambling Disorder: Prevalence and Characteristics in a Substance Use Disorder Sample – PMC, PubMed Central (PMC).; Retrieved September 21, 2022, from https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4019046/
- 22.M. Arias-Oliva, Variables Influencing Cryptocurrency Use: A Technology Acceptance Model in Spain – PMC, PubMed Central (PMC).; Retrieved September 21, 2022, from https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6436067/
- 33.M. Douglas, The Downward Spiral of Trading Addiction, Investopedia.; Retrieved September 21, 2022, from https://www.investopedia.com/articles/investing/071713/downward-spiral-trading-addiction.asp
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