Is Unregulated Crypto Promotion & Trading Fuelling Crypto Addiction?
- With 24X7 trading and a plethora of ads assuring multi-fold returns, an entirely new generation of crypto trading addicts has become the new reality
- Despite rising volatility and significant moderation in prices, about 10.2% of the global population using the internet owns some form of cryptos
For what was long considered to be a dubious asset class, the rise in the number of crypto investors belies the risks associated with trading in crypto assets.
Despite rising volatility and significant moderation in prices of popular cryptocurrencies, about 10.2% of the global population using the internet owns some form of cryptocurrency.
As of March 2022, over 81 million people created unique Bitcoin wallets on Blockchain.com, around 72% more than a year earlier and a 237% increase since 2018, according to data acquired by Finbold.
Trading in cryptocurrencies is just like gambling and can get extremely addictive for inexperienced traders harboring limitless ambitionsAnndy Lian, Chairman of BigONE Exchange
There are more than 270,000 confirmed transactions of Bitcoin daily. 29% of all millennial American parents own cryptocurrency. 51% of Americans in May 2021 had bought cryptocurrency for the first time within the last 12 months.
Considering the data from 2021 and factoring it into the current stats, the total users could reach one billion by the end of 2022.
GenZ and the millennial demographic class have taken more than a liking to cryptocurrency trading, allured by promises of netting impressive gains in a fraction of the time than it takes in equity-based trading and this has led to even novice traders downplaying the inherent risks associated with investing in seemingly dubious cryptocurrencies.
Instead, they are trading more frequently and often with more than just their surplus capital, a habit that is detrimental to generating positive returns from any trading activity.
“Having spent a lot of time volunteering in a Crypto addiction group, I have witnessed how a compulsive trading disorder can destroy lives and cause unimaginable stress for family members. I endeavor to educate them about the risks and rewards potential of crypto trading, in the hope that they will make more logical decisions rather than indulge in excessive trading. It is important to be self-aware about one’s trading addiction and consciously seek help before it consumes you,” says Anndy Lian, Chairman of BigONE Exchange.
Advertisements cajoling people to invest in cryptocurrencies are everywhere and often without the requisite disclaimers warning them about the speculative nature of this new asset class.
Combining this with the 600+ crypto exchanges that have sprung up globally makes it the perfect recipe for unhindered access to arguably the most volatile class of assets known to humankind. Trading in such volatile assets can be extremely stressful and losses can trigger an extremely aggressive trading style that only serves to worsen the situation.
Raj Kapoor, Chief Advisor at Acryptoverse, a Blockchain and crypto advisory firm, says all addictions start with the temptation, and trading in cryptocurrency is no different and the lure of small ticket sizes and the baiting capability of large gains are precursors to developing an addiction for cryptocurrency trading.
“Investors across the globe are increasingly spending a disproportionate amount of time obsessing over ticker tapes and charts, all in an attempt to spot the next cryptocurrency to net them multi-fold gains. What’s more, is that the market doesn’t rest and investors are continually checking out data points, purchasing a plunge, selling when it feels better; the dynamics are mind-boggling,” Kapoor says.
Experts advise addicts to acknowledge their actions
Experts say the first step to treatment is the acknowledgment of one’s addiction as it holds up a mirror and allows the addict to see their actions, choices, and symptoms in the bigger picture.
Addicts should seek therapy as a therapist can engage the addict in the process of conquering their addiction, through interventions like motivational interviewing.
This helps them understand their unhealthy relationship with trading, and free themselves of guilt and shame about the many losses and negative outcomes incurred due to the addiction to trading.
Dr. Monica Vermani, a Canadian psychologist says especially during the critical early days of overcoming an addiction to trading, addicts must ask trusted friends and family members to help them overcome triggers when they feel like trading.
Vermani cautions that moods related to the rise and fall of markets, hyper-focusing on trading or investing activities, like obsessive checking online, neglecting friends and family, and declining social activities are signs of addiction to trading or investing.
"Call a friend. Go out for a walk or a bite to eat. Take a class. Spend time with loved ones. Engage in hobbies or explore new interests — anything to help override old patterns and urges," she says.