‘It was a rush. Something I should stop, but couldn’t’: Inside the rising problem of cryptocurrency addiction – Screen Shot
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‘It was a rush. Something I should stop, but couldn’t’: Inside the rising problem of cryptocurrency addiction

“It was a rush. I wouldn’t compare it to a drug but I knew it was something I should stop but couldn’t,” an ex-crypto trader who invested a “big chunk” of his savings told SCREENSHOT. “It was the fluctuation of the market, to be honest. I’d see it going up and put everything I had in it, only for it to go back down again,” he continued. Asking to remain anonymous for fear of judgement from family and peers, the 26-year-old from Northern England recounts how he would spend many sleepless nights watching the market—a behaviour which ultimately impacted his mental and physical health.

From the criminal underworld of the early 2010s to mainstream public recognition in the 2020s, cryptocurrency has arrived and is here to stay. And it’s for good reason. Like most things in life, crypto and the blockchain is a double-edged sword: despite its damage to the environment, the digital currency can offer new and democratic ways of trading—void of centralised banks and governments. And yet, despite its nuances, it also has one crucial flaw that often goes unnoticed: the fact that such a volatile market can actually lead to addiction, with potentially destructive consequences.

“It’s definitely the most I’ve ever invested into something,” John Richardson, who has invested thousands into the coin XRP (also known as Ripple), told me. Although he affirmed he is not a crypto addict himself, Richardson mentioned that he actively encourages other people to invest. “A couple of weeks ago, I would’ve been $2,500 up—but we’ve had a bit of a crash across all coins since then. It doesn’t worry me though, I can stick around and wait for another rise.”

Others aren’t so lucky. “I lost everything, I couldn’t separate my feelings from the market,” a YouTuber who goes by the username Mate888 admitted in a heartfelt and unedited vlog—disclosing his devastating addiction to crypto investing. “I know for a fact there are so many people in the same shoes as I am and they don’t realise it.”

“If someone tells you that 99 per cent of people in crypto trading fail and one per cent make it, and you think you’re going to be that one per cent, I don’t know what to tell you. It’ll take years of time, a lot of sacrifice, heartache, sleepless nights and stress—only to find out that you can’t do it. You have to decide for yourself whether it’s worth it,” he continued.

What is cryptocurrency addiction?

“Addiction is a multifaceted struggle—when someone has reached a point of addiction, their decision making is often impeded,” said Andrew Harvey, a psychotherapeutic counsellor who specialises in addiction. “Trading in cryptocurrency can share similar processes to other behavioural addictions, for example, gambling, which we know, for some, is highly addictive.”

“[Crypto investing] can provide feelings of positive reward, highs, escape, change, excitement and a ‘fix’ or distraction from difficult experiences or feelings. All of these things contribute to its addictive and compulsive nature. For some, like gambling addiction, the negative consequences can be far-reaching and devastating,” Harvey went on to say.

Put simply, an addiction to cryptocurrency undoubtedly shares parallels with traditional gambling disorders. This is a view backed by multiple peer-reviewed papers, including a recent study published in ScienceDirect which concluded that “forms of speculative trading,” including cryptocurrency, “share similarities with gambling.” Published by researchers from the University of Adelaide, Flinders University and the University of Lethbridge, the paper showed that decisions when trading are “often based on limited information, short-term motives for gain, and highly volatile and uncertain outcomes.”

But what makes cryptocurrency addiction, in particular, so dangerous? Answering this question opens up an entirely new can of worms; a topic that deserves a book in itself. So, to keep things brief, here’s a summary of what makes such a volatile market so dangerous for our mental wellbeing—and why social media and a lack of regulation are only making matters worse.

The empty promise of big wins

As the cliché goes, history repeats itself. To put into context the state of the crypto market in 2022, let’s jump back 30 years. There are huge similarities between the dotcom boom of the late 1990s and today’s pump and dump schemes, penny stocks and, to put it bluntly, our society’s unhealthy dose of optimistic speculation. This doesn’t mean that crypto and blockchain technology is totally useless either. In fact, there’s a good chance crypto will change the face of Web3 as we know it. However, investing now is akin to investing in the companies during the dotcom boom before it burst.

Herein lies the problem with the crypto hype train at present: it’s an experimentative market where no one truly knows which coins will rise to the top and which are doomed to fail. “It’s just speculative analysis. The vast majority of people that get involved with crypto do so because they’re speculating on price fluctuations, hoping it’ll go up,” explained Matt Zarb-Cousin, co-founder of Gamban—a software company that blocks their users’ access to online gambling sites and apps.

And it seems many share his view; a new study conducted by Gamban concluded that more than half of Brits deem crypto trading as a form of gambling. Zarb-Cousin continued by arguing that the vast majority of coins are “essentially just Ponzi schemes: you get people who buy into particular coins and then you have this sort of ‘crypto evangelism’ where they become ‘de facto salesmen’ for the currency. They want other people to buy into them, making the coin go up in value. Eventually, these ‘salesmen’ will cash out for fiat currency. It’s a complete paradox really; [their actions are] the opposite of their sales pitch, [which says that] these cryptocurrencies are the future.”

“If that’s the case, you’d think the logical thing to do would be to buy into the cryptocurrency and wait until the benefits come into fruition. In reality, however, they’re just treated as speculative assets—no one can really adequately explain how they’re going to underpin the internet of the future,” the Gamban co-founder elucidated.

“That doesn’t mean you can’t make a lot of money though,” Zarb-Cousin continued, drawing upon the vast amount of self-proclaimed ‘bitcoin millionaires’ who are now legitimately living an early retirement. “If you bought Bitcoin ten years ago and cashed out now, you would likely be a millionaire.”

It’s true, Bitcoin’s rise in value over the last decade has been astronomical. If you invested around $13 into the coin back in 2012, you would be at a whopping $38,490 now. “The high risk, fluctuating cryptocurrency market appeals to the problem gambler,” Chris Burn, a gambling therapist at Castle Craig Hospital—a Scotland-based rehabilitation facility that has recently added treatment for cryptocurrency addiction—remarked.

“It provides excitement and an escape from reality. Bitcoin, for example, has been heavily traded and huge gains, as well as losses, were made. It’s a classic bubble situation,” he shared. But the ambition of riding the wave to get-rich-quick remains just a pipe-dream for many, Zarb-Cousin added. “The vast majority of people lose their money—particularly if they combine [their trading] with some exchanges that offer leverage trading.”

There is also societal pressure which acts as wind to the flame of addiction. Let’s face it, the vast majority of people, myself included, would love to be rich. As the cost of living crisis—a result of a decade-long Tory-led austerity fuelled by the war in Ukraine—bites, more people are willing to invest in fluctuating markets in desperate hopes of a cash-out. This, married with the pressure men already face through the patriarchy to value themselves based on material assets, plays an important role in why crypto addiction is so widespread among the demographic.

Echo chambers, de facto salesman and algorithms

As covered above, social media undoubtedly plays a part in influencing the especially vulnerable into the crypto market. Anyone who has spent time on the investor side of social media would be inundated with ads from crypto traders, eager to influence others into their newest coin.

With the correct branding, social media allows any layman to present themselves as a ‘crypto pro’. Algorithms also play a huge role in helping these ‘de facto salesmen’ target an engaged community vulnerable to cryptocurrency addiction. “Social media apps like TikTok are really geared towards this,” Zarb-Cousin highlighted in an interview with Gary Stephenson, an economist and former interest rate trader.

“The algorithm works in a way that if you watch a piece of content all the way to the end, it will start showing you lots more on that topic. It can really take you down a rabbit hole. The amount of content you can watch in a short space of time lends itself to almost conditioning. It can be very persuasive, particularly if you have made money in the past [through crypto],” he continued.

Modern-day gambling faces unique and multifaceted challenges. Unlike in the 80s when individuals would have to physically place a bet or use a slot machine, smartphones have enabled us to gamble in an easy and frictionless way. “Our mission is to try and build friction [between the user and gambling behaviour] when technology has broken it down,” Zarb-Cousin told SCREENSHOT.

“People become emotionally and financially [invested] into a project they don’t often fully understand. They’re being shown these videos over and over again by influencers already invested in a particular coin. It’s mainly people who have bought into the scheme and want to encourage others to do so to increase their investment.”

And it’s not just rogue crypto influencers buying into this trend either. Earlier this year, Kim Kardashian and Floyd Mayweather Jr were named in a lawsuit alleging that they helped promote crypto firm EthereumMax, which was found to allegedly make “false and misleading” statements that left investors with heavy losses.

According to the Financial Conduct Authority (FCA), the Instagram post regarding EthereumMax, which was shared with Kardashian’s then 250 million followers, may have been the most widely seen financial promotion of all time.

Yet, despite their concerns and repeated warnings, the UK government could suffer “limitless” losses as a result of crypto. As of today, crypto assets remain widely unregulated in the country. In a recent review, the Treasury announced “the intentions to consult later this year on regulating a wider set of crypto asset activities, in view of their continued growth and uptake worldwide.”

An unregulated market seeping its way into the mainstream

And so, despite such announcements, the crypto market remains widely unregulated—able to advertise its services freely without the obstacles that traditional gambling or investing markets face. “It’s an unregulated form of gambling that masquerades itself as ‘investing’ which is extremely dangerous,” Zarb-Cousin told SCREENSHOT.

This issue of regulation, or lack thereof, is a far-reaching problem. Last year, crypto firms launched a record-breaking promotional push in London, targeting millions of commuters with 40,000 adverts on billboards, tube stations and double-decker buses (which seems to be a bit of a trend). Watford FC is now even sponsored by Stake.com—a firm branding itself as not just a depository but a “crypto casino.”

And it’s not just limited to the UK either: in Spain, for instance, gambling advertisements have been banned yet replaced with crypto exchanges. In the US, entire stadiums are being sponsored by crypto firms, with LA’s Staples Center renamed after a cryptocurrency firm. “This legitimatises the market further,” Zarb-Cousin noted, “it makes it feel like a safe investment.” Likewise, the rapidly growing reliance on advertisement and sponsorship revenue from crypto firms means influential companies and/or figures will be less likely to speak about the negative impact crypto addiction can have.

What next?

Although cryptocurrency trading addiction shares similarities with traditional gambling, the issue is nuanced and varied, thus requiring a completely unique approach. Crypto may seem to have surfaced out of nowhere but it’s undeniably here to stay with more people investing in the market each and every year. According to the New York Digital Investment Group (NYDIG), 46 million Americans—equating to roughly 22 per cent of the adult population—own a share of Bitcoin. By 2025, financial analysts say, the global blockchain market will grow by $39.17 billion.

Although not everyone who invests in the market will display addictive tendencies, this is, without a doubt, a far-reaching issue which needs urgent addressing. “There is a growing risk that cryptocurrency will fill the void from the crackdown on other gambling companies,” Zarb-Cousin concluded, warning of the danger of having crypto firms plastered on stadiums, over football team shirts, bus shelters and Instagram feeds.

But this is only one piece of the puzzle. Currently, the rapid growth of crypto tech has led the health service in a race to catch up. As of this current research, the NHS does not have any support specifically for cryptocurrency addiction. Services like Gamban, as well as countless addiction support groups popping up around the world, are helping to soften the blow—yet to adequately address this problem, a wider cultural shift needs to be made.

Yes, crypto and the blockchain have huge advantages for society. Yes, you can make a lot of money—providing you play your cards right. But the crypto market needs to be viewed just as you would a gamble, something to invest only what you can afford to lose and not as a stable way of making revenue. Until we change that—through restrictions on advertising, regulation and education—millions of people will feel the addictive grip of the market and thus suffer the consequences.

Meet the women closing the gender gap in cryptocurrency and blockchain technology

Though cryptocurrency and blockchain technology have been celebrated for their potential ability to level the playing field in the world of fintech, that reality hasn’t yet been fully realised. Across all racial and ethnic groups, twice as many men continue to invest in crypto than women, according to CNBC. This statistic represents a kaleidoscope of social, historical, and economic factors—given how many females and non-binary people tend to face more financial insecurity than men.

Since crypto first bled into the mainstream, many have lauded its capacity to become a currency that encourages diversity and introduces inclusivity within the male-dominated fintech space. In recent years, especially after the pandemic has caused people to rethink their ideas about personal finance, many women and minority groups have reinforced their presence within the industry. How have they achieved this feat? By prioritising community-focused rather than individualist approaches in most cases.

Organisations such as Women in Blockchain and the WOC Blockchain Network have continued to demonstrate the importance of diversity in crypto investing and blockchain technology. Women in Blockchain state their mission as “working towards equality needed to build products, communities and economies that work for all.” By creating opportunities for open collaboration and discussion, they hope to make cryptocurrency more accessible to all who attend their in-person and online meetings.

In a similar vein, BOYS CLUB is a community that encourages women and non-binary people to become more involved in the emergence of a world saturated by Web3. According to venture capitalist Li Jin, Web3 “is intrinsically tied with financial value. Anytime you introduce financial success, that’s what really incites strong emotion.” If the phase comes to fruition, Web3 will reimagine cryptocurrency and blockchain technology, integrating these relatively fringe aspects of the internet into the everyday lives of people worldwide. BOYS CLUB hopes to be a “soft landing” for those who are curious about the future evolution of crypto technology.

BOYS CLUB’s co-founder Deana Burke told Vox that her organisation has become much more diverse than other crypto communities that she’s previously been involved in. For instance, Burke mentioned that members are “trying to figure out how their acupuncture business could move into this Web3 world,” among other fusions between small business ventures and the ever-expanding digital world.

Alternatively, other female-founded groups have harnessed the eye-catching potential of the metaverse to promote gender equality in the world of crypto. Women of Crypto (WOC) is a project featuring 8888 NFT avatars of women. Each was created to be “diverse, yet one of a kind, so as to digitally represent and celebrate the special traits particular to every single woman of the world.” Founder Amy Matsushima announced that the entire collection sold out on the day of its release, 3 February 2022.

Apart from creating dazzling NFTs, Matsushima’s mission for WOC is as diverse, multifaceted, and female-centric as the company’s avatar collection. She seeks to close the gender gap in cryptocurrency through education. From pre-filmed courses on blockchain fundamentals to step-by-step blueprints on how to create a successful NFT project, Matsushima and her team provide a wealth of information to those who are a part of their Discord channel. Alongside these women-led communities, there are many others who continue to rally behind the cause to diversify cryptocurrency and provide alternative options outside of traditional—and male-dominated—banking systems.

Cryptocurrency has been seen as a solution to confronting climate change, addressing food waste and hunger, and supporting a plethora of other worldwide problems in between. One salient social issue that it has helped includes providing support to domestic abuse victims. The National Coalition Against Domestic Violence (NCADV) in the US states that “up to 99 per cent of domestic violence victims experience economic abuse during an abusive relationship.” What’s more is that the organisation notes that “finances are often cited as the biggest barrier to leaving an abusive relationship.”

Economic abuse is considered to be the act of creating barriers to one’s financial independence as a means of controlling most or all aspects of their life. Thanks to the anonymity of crypto, many stories have surfaced over recent years about domestic abuse victims who were able to exit precarious relationships because of digital currencies. In a CoinDesk article, one sexual assault survivor narrated their story of crowdfunding on Seeds, which allowed them to efficiently raise money without revealing their identity.

The diversification and continued development of cryptocurrency is also significant for women in developing countries. Bitcoin entrepreneur and advocate Roya Mahboob has worked with women throughout Afghanistan, in some cases even helping them save enough through crypto with the aim of affording to divorce abusive partners. Former senior policy advisor in the US Department of the Interior, Alison Grigonis noted that “in many parts of the world, women […] do not get the full value of their work and are reliant on others to make investment decisions.” Furthermore, she stated at the 2017 Blockchain Summit that there are “places where women don’t have a legal identity outside of their families or husbands.”

Though in many developing countries women can legally have bank accounts, there can be cultural barriers preventing them from obtaining access to them. As a result, they become solely dependent on family members to manage their assets. Mahboob sees blockchain technology and cryptocurrency as antidotes to this widespread problem that will benefit not only women, but families globally. To continue promoting digital and financial literacy among women in her own country of Afghanistan, Mahboob has founded the Digital Citizen Fund. Like many of the Western-based organisations previously mentioned, it works to empower women through technology and innovation.

At times, the crypto world can seem bleak. In September 2021, for instance, The New York Times reported that mining bitcoin uses more electricity than the entire country of Finland does annually. While digital currencies can never be a remedy for all of our current social, environmental, and institutional dilemmas, they do present pinpricks of light that inspire hope for the future ahead—especially for women, minority groups, and others who feel left out of traditional fintech institutions.