Crypto Addiction Crisis Brewing

What has around-the-clock availability, the excitement of gambling, a gamified user experience, and the ability to change your life – for better or worse – overnight?


For years, digital currencies have been the butt of many jokes – as have the “crypto bros” who’ve been unable to detach from their screens 24/7 for fear of missing out on buying meme stocks during a dip. But now addiction specialists are warning that there is an alarming number of people reporting cryptocurrency addictions. Even more alarming is the high rate of self-harm and suicide among those struggling with crypto addictions. 

If you are struggling with a cryptocurrency addiction, contact the Substance Abuse and Mental Health Services Administration’s National Helpline by calling 1-800-662-HELP (4357). SAMHSA’s National Helpline is free, confidential, available 24/7, 365, and is available in both English and Spanish. 

Cryptocurrency Addiction

A “cryptocurrency addiction is a pathological obsession and compulsion to buy and/or sell cryptocurrencies such as Bitcoin, Ethereum, and other alternative coins. 

“Cryptocurrency addiction may also involve a preoccupation with staying updated on changes in price by constantly observing charts, reading crypto news, and engaging in other means of informing oneself of potential price action,” according to New York-based therapists, husband and wife team, Lin and Aaron Sternlicht. 

“Cryptocurrency addictions can significantly impact one’s mental health, causing euphoric highs when an individual increases their portfolio and devastating lows when an individual is at a loss.  As such, even if an individual is a cryptocurrency long-term investor and not a cryptocurrency day trader one may still experience a negative impact on their mood and may still obsessively engage in obsessive and compulsive non-related trading activities.”

Although financial addictions and financial consequences of addiction are well-known in the field of mental health, it’s worth noting that cryptocurrency appears to have characteristics that make individuals more prone to crypto-related addictions than traditional gambling, sports betting, or even traditional financial investments such as: 

  • Crypto can be traded around the clock, unlike most stocks. 
  • People don’t need to drive to a casino to invest in a coin. 
  • The volatility in crypto prices, especially alternative currencies like meme coins, can be quick and provide the brain with a chemical rush that feels like a reward.
  • Given crypto’s decentralized nature, it can be easier to hide the financial impacts of crypto addiction.

In the last few years, crypto addiction recovery specialists like the Sternlichts have noticed a dramatic increase – more than a 40 percent increase in the number of people reaching out and seeking help for a crypto addiction. 

“The majority of calls that I’m getting tend to be around crypto, sports betting, and NFTs,” said therapist Dan Field, clinical supervisor of the UCLA Gambling Studies Program and co-founder of Stop Betting Sports. “It’s very much on the radar of treatment providers right now.”

“Since the start of the pandemic, on average I’ll get two clients a month who’ve never stepped foot into a casino and have never placed a bet but now have a full-fledged gambling disorder because of this unhealthy relationship with online money,” Timothy W. Fong, a professor of psychiatry and co-director of the UCLA Gambling Studies Program, told the LA Times

“It’s like a bar without a bartender, and there’s all this new alcohol and people are pouring it themselves,” Fong said. “There’s no 1-800-gambler number for those apps,” Fong said. “There really isn’t any 12-step support group for people who fall into this world of digital finance addiction.”

Crypto Addiction Crisis Brewing

Throughout the last decade, cryptocurrency has transformed from an online oddity into a pop culture phenomenon. Although the value of the cryptocurrency market can fluctuate dramatically from minute to minute, at its peak in early 2022, the crypto market was valued at a record-high $1.8 trillion, according to Coin Market Cap, a site that tracks cryptocurrency statistics. 

Many investors were optimistic that the value of these cryptocurrencies was only going to increase and there seemed to be a trend unfolding in the last two years – increased buy-in came after many celebrities and well-known companies began to invest in digital currency. 

Celebrities like Matt Damon, Reese Witherspoon, Kim Kardashian, athletes like Tom Brady, model Gisele Bundchen, and even politicians have given crypto their stamp of approval – some even agreeing to take part of their salary in the form of cryptocurrencies. 

Tesla bought $1.5 billion in Bitcoin, crypto trading platform Coinbase went public, and Bitcoin and Ethereum hit record highs. 

But in May 2022, cryptocurrencies lost more than half of their value in a matter of hours as fears of an economic slowdown prompted mass selloffs of what investors believe to be riskier assets. In just 24 hours, a massive sell-off wiped more than $200 billion from the cryptocurrency market, according to CoinMarketCap. 

As of the timing of this blog in May 2022, crypto prices continue to decline. 

Bitcoin and Ethereum, the two hottest forms of cryptocurrency, are now down 58 percent and 60 percent, respectively, from those peak 2021 levels. Coinbase has lost 85 percent of its value, and Robinhood, which has made crypto a key part of its global expansion strategy, has been hit nearly as hard. 

While proponents of digital currency have long pointed to the lack of regulations in the cryptocurrency space as a positive for investors’ bottom lines, others like Owen Thomas, have long interpreted the lack of oversight, rules, and regulations as reasons to not invest in the risky wild west digital currency space.

“Crypto isn’t a democracy, it’s a cheerocracy,” Thomas said. “And the collapse of asset prices is totally spoiling the feel-good, ‘we’re-all-gonna-make-it’ vibes that helped fuel crypto upwards in 2021.”

“It would be easy to say ‘it was always an obvious scam,’ but these are real people affected and real lives changed,” argued Kevin Schawinski, co-founder and CEO at Modulos AG.

Although more research is currently being conducted regarding cryptocurrency and addiction, in April 2022, a study from Finland found that cryptocurrency traders were more likely to experience high rates of gambling, video game addiction, internet addiction,  experience significant bouts of depression, carry more than six figures in debt, and struggle with addictions or abuse of alcohol, cocaine, and/or Adderall. 

But because The American Psychiatric Association has not yet classified cryptocurrency addiction as a subset of gambling addiction, there’s currently a gray area that allows many insurance companies to decline coverage for crypto-related addiction therapy.

“There’s not enough research in it to really have it be diagnosable yet,” Sternlicht said.

Adding to the complications, not all addiction specialists themselves understand crypto enough to treat the addiction or fully understand how the addiction forms in the first place. 

Crypto is poorly understood among treatment providers and thus only a “very, very limited amount of research is available,” said Doug LaBelle, a social worker and gambling counselor in Wisconsin who has been studying the convergence of gambling and investing.

“It is not a general knowledge issue among mental health clinicians because it’s so new,” he said. “I presented to one group about what I thought were the basics of crypto and blockchain, and the most common comment I got back: ‘You gave me a headache.’”

LaBelle recommends asking yourself or a loved one questions to get a better idea of if and how crypto investments have changed your behavior? For example: 

  • Are you losing larger amounts of money over time? 
  • Do you invest more when you’re stressed? 
  • Have you tried to stop and failed? 
  • Are you irritable when attempting to scale back? 
  • Are you often preoccupied with investing to the detriment of work and personal duties? 
  • Do you lie about or hide it? 
  • Are you borrowing money to fund your investing activities? 
  • Has crypto jeopardized or ended relationships, jobs, or career opportunities?

For people who aren’t able to kick the habit or maintain a healthy balance on their own, there are some gambling-disorder resources that can help, Jonathan S., co-chair of the Los Angeles chapter of Gamblers Anonymous, told the LA Times

Options include inpatient and outpatient programs at rehab centers as well as individual therapy and group meetings, many now held over Zoom.

“More attendees are joining our meetings that are addicted to the stock market or trading — we used to see this with day trading and now we’re seeing this with cryptocurrency. People think it’s sexier to be in crypto today than the market,” he said. “The most important message is that there is help available.”

Big Wins, Even Bigger Losses

Although it will likely take some time for the research to catch up, it’s hard to ignore how crypto addictions are impacting the lives of many Americans like Luis Taveras. About seven months ago, 47-year-old Taveras quit his job as an intake receptionist at a medical clinic in the Bronx and put the entirety of his savings – all $50,000 – into the crypto market.

Taveras had seen a tweet from Tesla CEO Elon Musk about cryptocurrencies and began to invest in Bitcoin, Ethereum, and other higher-risk microcap coins. In May, Taveras’ told the LA Times his initial $50,000 investment is now worth $5,000 thanks to recent dips in the crypto market. 

Taveras acknowledged he’s been avoiding his friends and family since he started investing in crypto and notes that he recognized he was addicted to crypto because he’s previously struggled with addiction to drugs and alcohol. 

“I’ve been in long-term recovery for alcohol and drug addiction, so I know when the addictive behavior takes over,” said Taveras, who spends “all night, all day, around the clock” investing, reading about investing, and talking to other investors about investing. “It doesn’t have to be a substance.”

Unlike his substance addictions, Taveras still holds out hope that his crypto addiction will prove to have a good return in the long run. “Not yet, but that’s the hope,” he said. 

While Taveras was familiar with the warning signs of addiction, not everyone is familiar with what to look for when it comes to cryptocurrency addictions. 

Drew Vosk, a 30-year-old cryptocurrency investor who lives near Northern Virginia and has a crypto YouTube channel, got hooked on cryptocurrency investing around 2017 when he started putting money into Ethereum. 

“I wake up, I’m depressed,” he said. “I spent all the money I had on buying cryptocurrency and building out crypto mining rigs,” he said. “I was addicted. I was obsessed.”

At multiple points, Vosk turned his $1,000 crypto investment into $100,000, only to see those profits evaporate as quickly as they appeared. “I’m like, ‘Wow, I can’t believe this. Like, that’s just gone.’”

Although warning signs of an addiction may be different for each individual, the Sterlichts say there are 10 signs they look for when consulting with prospective clients seeking cryptocurrency addiction treatment.

10 Signs of a Cryptocurrency Addiction includes:

  1. Taking an increased risk with minimal strategy, or the need to make bigger wagers in order to receive satisfaction or excitement.
  2. Becoming obsessed with researching and trading cryptocurrencies or having a preoccupation or compulsion to constantly check prices.
  3. Losing interest in social/leisure activities that were once pleasurable at the expense of engaging in trading.
  4. Trading for an adrenaline rush or to induce pleasure.
  5. Having made unsuccessful attempts at reducing the time spent on trading and trading-related activities, or having made unsuccessful attempts from taking a break or abstaining from trading-related activities.
  6. Trading compulsively or experiencing strong urges and cravings to engage in trading-related activities.
  7. Experiencing stress, anxiety, a low mood, irritability, insomnia, anger, or other unwanted and unhealthy mental health symptoms when trading or when unable to trade.
  8. Having to lie or hide trading or trading-related activities from loved ones.
  9. Stealing, taking loans, selling assets, or using money that should be spent on bills or necessities in order to make trades.
  10. Continuing to trade despite adverse consequences to financial stability, relationships, physical and mental wellbeing, or other important life areas.

Gamified Investments 

Lia Nower is the director of gambling studies at Rutgers University. Nower told the Washington Post that part of the problem with cryptocurrency and why more and more people are finding they are addicted to it is because sleek investing trading apps like Robinhood make buying cryptocurrency feel more like a video game than an actual financial exchange.

“They know what it is to get people more engrossed in something — that high action, that quick turnover with that positive reward,” she said. “It’s why people like lottery scratch-off tickets because they can scratch madly and they get their reward in that second and that gives you a burst of dopamine. These people are doing a similar thing.”

Ashwin Manicka, a spokesperson for Robinhood, disagreed with Nower’s assessment that the company’s app gamifies investing to the detriment of its users in a statement to the Washington Post.

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

Further research is likely still necessary, but addiction specialists worry the rising popularity of online casinos that allow users to gamble with digital currency, as well as the unregulated nature of such casinos and crypto apps in general, makes these crypto apps incredibly dangerous – especially for those who are financially unaware of the consequences. 

“The apps are incredibly sophisticated, they’re gamified, they draw you in and [because] they’re not regulated the way a casino would be or the stock market would be,” added Fong, the UCLA gambling program co-director. “They have their own made-up set of rules. So I’ve seen a number of patients come in and really get in trouble because of the apps combined with a lack of financial understanding.”

If you’re struggling with a crypto addiction but cannot afford specialized treatment, consider services tailored for those with a gambling addiction or treatment counselors who specialize in gambling addiction, recommends Nower. “What you’re really addicted to is the action of taking the risk,” she said. “Anybody who’s a good treatment provider for gambling can treat crypto addiction.”

If you are struggling with a cryptocurrency addiction, contact the Substance Abuse and Mental Health Services Administration’s National Helpline by calling 1-800-662-HELP (4357). SAMHSA’s National Helpline is free, confidential, available 24/7, 365, and is available in both English and Spanish. 

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