There is a buzz around cryptocurrency. Dramatic fluctuations in value make them tempting for investors eager to make quick money. For some, investing in them has been a smart move, but it needs to be done with care.
The combination of volatile currencies such as Bitcoin and easily accessible trading platforms like Robinhood, have created a market that is dangerously addictive. The pandemic has exacerbated the problem by leaving many people stuck at home looking for something to do.
In fact, at Paracelsus Recovery, we have seen a 300% increase in cryptocurrency dependency since 2018. Yet because of a lack of regulation new traders are often unaware of just how addictive it can be.
Unlike gambling, most people are unaware of the risks involved. The constant access to cryptocurrency trading through smartphones and computers also heightens the danger because it means that those who are struggling with an addiction can stay perpetually engaged.
— Jan Gerber, CEO of Paracelsus Recovery, told Arabian Business.
For example, imagine if alcohol was rebranded as a vitamin juice. If you started drinking this juice, you would feel like you were doing the right thing, which would make you feel good. In other words, it would release dopamine. Then, as the alcohol releases more dopamine into your system, you would feel even better.
That lack of awareness could easily lead to you unknowingly developing an alcohol abuse problem. Which is exactly what is happening with cryptocurrency trading.
To help combat these issues, our experts have taken a deeper look at the problem and how to address it.
Why is cryptocurrency addictive?
In our experience, cryptocurrency markets have an inherently addictive structure, making it more like gambling than investing. For example, the markets are highly volatile and millions can be made overnight. This makes it feel more like winning big at a casino than making good returns on a smart investment.
But as our CEO Jan Gerber told Arabian Business, “Unlike gambling, most people are unaware of the risks involved. The constant access to cryptocurrency trading through smartphones and computers also heightens the danger because it means that those who are struggling with an addiction can stay perpetually engaged.”
What are the signs someone is developing an addiction?
We have created a list of warning signs based on our experience of working with ultra-high-net-worth individuals (UHNWIs) who have battled crypto-trading dependencies.
The key warning signs of any addiction are withdrawal symptoms and tolerance. Withdrawal symptoms include feeling irritated, anxious and distressed when you cannot trade or check the markets. Tolerance means that you need to keep upping the amount you invest to feel the same buzz.
Other signs of a cryptocurrency addiction include:
o Finding yourself preoccupied with the latest cryptocurrency news (eg always keeping a CoinMarketCap tab open in your browser).
o Trading in secret or minimising how much you trade to your loved ones.
o Difficult emotions such as guilt, anxiety or stress triggering an urge to invest.
In the pre-pandemic world, many high-net-worth individuals would work 60-plus hours a week and then let off steam on a Friday night. Without that routine, people began looking for other means of obtaining that relief.”
— Jan Gerber, CEO of Paracelsus Recovery in The Telegraph.
If you are worried about your cryptocurrency habits, ask yourself:
- Is the price of Bitcoin the last thing you look at before you sleep and the first thing you check when you wake up?
- Do you sometimes find yourself acting on irrational beliefs, such as feeling ‘lucky’?
- Do you carry on trading in cryptocurrency after losing money in an attempt to gain it back?
- Do you find it hard to identify what you are feeling when you are trading?
- Have you failed to meet deadlines or expectations because of your cryptocurrency activities?
If you answered yes to any of these, you might be developing a dependency.
How can you make sure you trade in moderation?
Practice gradual de-exposure
Try to spend at least one day a week away from the markets. If you cannot do this, spend a few hours away. Then, slowly build to one day a week, then two days and so on. But, be extra mindful about your coping strategies during this period. If you have become dependent, it means your brain might be accustomed to significant hits of dopamine, which it could look for in other substances or behaviours.
Set clear-cut boundaries and limits
Create a routine that involves trading at similar times each day and always make sure you have set yourself financial and time limits. Create psychological boundaries too. For example, remind yourself that you are dealing with uncontrollable probabilities and never view cryptocurrency trading as your main source of income.
Understand your trigger points
Cryptocurrency addictions are usually linked to the euphoria (aka dopamine) we feel when we engage in thrill-seeking behaviours.
There are personal aspects too. If you feel lonely or restless, trading cryptocurrency can give you a false sense of control over these emotions. As our CEO told The Telegraph, “In the pre-pandemic world, many high-net-worth individuals would work 60-plus hours a week and then let off steam on a Friday night. Without that routine, people began looking for other means of obtaining that relief.”
So, when it comes to your crypto-trading habits, identify your triggers and develop alternative coping mechanisms for each one. For example, if you notice that the urge to trade kicks in when you feel lonely, make a plan to see a friend the next time that feeling hits. If you start thinking about Dogecoin when you are bored, distract yourself with music or exercise.
Although it is an emerging trend, cryptocurrency addiction is very real. Without adequate support, it can lead to a variety of mental health issues, from shame and depression to substance abuse. If trading is causing you intense distress, you are losing vast sums of money or you are developing secondary mental health conditions, you should seek professional help as soon as possible.
If you are struggling with a cryptocurrency addiction, we can help. At Paracelsus Recovery, our treatment ideology is grounded in our core principles of empathy, pragmatism and care. We will design a comprehensive and individualised treatment programme tailored to your unique needs and carried out by our team of highly qualified professionals, who are on hand to support you 24/7.
We work exclusively with ultra-high-net-worth individuals whose mental health challenges often go unnoticed due to the misconception that financial security ensures mental stability. And we only treat one client at a time, which means we provide the strictest confidentiality.
We are one of the few treatment centres in the world to create specific treatments that help you overcome cryptocurrency addiction. This includes treating the underlying reasons for your addiction (which can range from childhood trauma to nutritional imbalances), extensive psychotherapy, psychoeducation, financial coaching, and money-free trading if you do not want to adopt an abstinence approach to your dependency.
We recognise the pandemic has been a difficult time for many UHNW individuals. But because we are a treatment centre, we are able to stay open to support our clients. Alternatively, we can send our team to you or provide a fully-virtual treatment programme.
Find out more by contacting us at [email protected] visiting our website or following us on Twitter.