Depression and addiction are plaguing cryptocurrency traders

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When Joanna Garzilli was in Venice, California, for a holiday party in 2017, the bikini dancers were on stilts, the drinks were flowing, and the conversation was about one thing: cryptocurrency. It looked so sexy, she remembered thinking. Attracted by the glamorous crowd, she later invested and achieved big: an $85,000 profit from a cryptocurrency called GRT, bringing dreams to life at the Ritz-Carlton Residences.

But soon, her business became reckless, she said. Garzilli bet 90% of his savings on a coin that lost tens of thousands in days. She made risky investments in viral meme currency and was constantly checking her trading apps to see how much money she made or lost. Her nights were sleepless, but Garzilli kept chasing the next big payday.

“Crypto is like entering Hades,” she said. “Cryptocurrency can bring out the darkest parts of ourselves if we have an addictive personality; and I have a very addictive personality.”

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As the cryptocurrency boom has joined the ranks of ordinary investors chasing a life of mansions and yachts, Mental health experts say this is triggering an increase in addiction. Price spikes and drops provide a level of excitement that is difficult to replicate through the most volatile stocks and bonds. The highly unstable nature of cryptocurrency can reduce profits to zero in the blink of an eye, leaving investors with mountains of debt, fractured relationships and suicidal thoughts, addiction experts said.

Therapists such as Aaron Sternlicht of New York say they are seeing an influx of people seeking help for cryptocurrency addiction, although treatment is only available to a privileged few.

“Many people who need treatment are not going to end up getting treatment,” he said.

Over the past decade, cryptocurrency has gone from an oddity to a central part of financial markets and popular culture, its market cap soaring from $5.4 billion to $1.8 trillion, according to Coin Market Cap, a website that tracks cryptocurrency statistics. Meanwhile, celebrity endorsements create a luxurious billboard for the lifestyle cryptocurrency can provide.

Over the past few months, Matt Damon has promoted Crypto.com, an app that can help you trade cryptocurrencies. Tampa Bay Buccaneers quarterback Tom Brady and his wife Gisele Bündchen are advertising cryptocurrency exchange FTX. Influencers on YouTube, TikTok, Instagram and Twitter show lives filled with first class flights and luxurious rooftop pools, meaning cryptocurrency is the best way to get rich.

Cryptocurrency has characteristics that make it more prone to addiction than sports betting, gambling and traditional financial investments, according to addiction scholars. Cryptocurrencies can be traded 24 hours a day, unlike most stocks. People don’t need to drive to a casino to invest in a currency. The volatility in the prices of cryptocurrencies, especially alternative currencies like meme coins, can be quick and provide the brain with quick feelings of reward. And given the decentralized nature of cryptocurrency, it may be easier to hide the financial impacts of addiction.

Lia Nower, director of gambling studies at Rutgers University, said elegant investment apps increase addiction rates. With real-time color graphics, trading apps like Robinhood make buying cryptocurrencies feel like a video game.

“They know what it’s like to get people more engrossed in something — that intense action, that quick turnover with that positive payoff,” she said. “That’s why people like lottery scratch cards, because they can scramble wildly and get their reward in that second and it gives you a dopamine burst. These people are doing a similar thing.”

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While research is still under development, several recent studies document links between cryptocurrency trading and addiction. In April, a team of Finnish researchers found that cryptocurrency traders also had high rates of gambling, video games and internet addiction. Cryptocurrency traders, who were more likely to be immigrants, also had higher levels of psychological distress and loneliness compared to stock traders, they found.

Ashwin Manicka, a spokesperson for Robinhood, strongly disagreed that the app plays some role in cryptocurrency addiction.

“It is our view that such allegations are an elitist attack on ordinary people who have been empowered by financial products intuitively designed to participate in the equity and cryptocurrency markets for the first time,” he said in a statement. “We have yet to see any concrete evidence to support these anecdotal claims, and the data paints a different picture.”

Sternlicht and his wife, Lin, a team of husband-and-wife therapists in New York who are treating cryptocurrency addiction, said they have seen an approximately 40% increase in people from around the world calling in to get their therapy services tailored to their needs. cryptocurrencies. Their services cost $2,500 for a consultation and $25,000 for a 45-day therapy treatment plan that is more intensive than traditional forms of speech therapy. To treat addiction, they meet with family members, have access to bank accounts, and meet with patients several times a week.

Most of her clients seek help when they are in more than six figures in debt, have ruined their relationships, face significant bouts of depression and are carrying other addictions, notably alcohol, cocaine and Adderall. Aaron Sternlicht added that the people who come to the office often have significant wealth, but for those without many means, seeking treatment can be difficult.

The American Psychological Association has not classified cryptocurrency addiction as a subset of gambling addiction, Sternlicht said, which creates a gray area that allows many insurers to decline coverage for cryptocurrency-related addiction therapy.

“There’s not enough research yet to make it really diagnosable,” he said.

Despite this, Nower said, people suffering from cryptocurrency addiction do not need to seek out specifically tailored services and can get treatment from a gambling addiction counselor. “What you’re really addicted to is the action of taking a risk,” she said. “Anyone who is a good gambling treatment provider can treat cryptocurrency addiction.”

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Drew Vosk, a 30-year-old cryptocurrency investor who lives near Northern Virginia, became addicted to investing in cryptocurrencies around 2017 when he started putting money into Ethereum. From there, he became interested in cryptocurrency mining, maxing out his credit cards to buy the necessary equipment for it. “I spent all the money I had buying cryptocurrencies and building cryptocurrency mining rigs,” he said. “I was addicted. I was obsessed.”

At various times, he turned a $1,000 investment into $100,000, only to see those profits evaporate. When oscillations happen, the impacts are significant. “I wake up, I’m depressed,” he said. “I’m like, ‘Wow, I can’t believe this. Like, it’s over.’”

And for Garzilli, 49, living with a cryptocurrency addiction is a daily battle. When a new investment opportunity comes on your radar, the urge to invest and chase another payday high is strong. As well as the fear of losing. “It’s like a tight feeling in your stomach,” she said. “It’s like my whole body is being dragged to ‘Go and do it. Go do the trade.’”

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To manage, Garzilli signed up for a 12-step program similar to Alcoholics Anonymous. She forces herself to disconnect from the screen throughout the day. She goes for walks, meditates, and drives if the urge to invest in a coin becomes too great. She currently invests in less risky cryptocurrencies and tells herself that she needs to build her portfolio with an eye on retirement.

Even so, Garzilli said government action is needed to curb scammers targeting cryptocurrency investors and scale back projects that provide little value.

“People are still going to be murdered,” she said. “Until we have stronger regulation.”

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