Initially, Michael Walsh enjoyed the excitement of his new hobby: buying and selling cryptocurrency. He started by putting £8,000 into various digital currencies as the cryptocurrency market boomed in 2020.
But within months the 42-year-old’s mood and behavior had changed. He was always tired because he regularly woke up at all hours of the night to trade, checking his phone every half hour.
He even missed the family vacation with his wife and two young sons he was looking forward to in Dubai so he could stay home and monitor his crypto trading positions.
Michael, whose name has been changed to protect his anonymity, is one of a growing number of cryptocurrency addicts whose lives have been turned upside down by their trading habits.
GamCare, which operates the National Gambling Helpline, reveals it is facing increasing calls from hundreds of investors who have lost thousands of pounds trading Bitcoin and other virtual assets.
Hooked: The National Gambling Helpline reveals it is facing more calls from hundreds of investors who have lost thousands of pounds trading Bitcoin and other virtual assets
It took as many calls from people citing cryptocurrency addiction issues last year as in the previous four years combined.
In some cases, people have lost mortgage deposits and stolen them from loved ones to fuel their trading habit.
Castle Craig, a rehabilitation center 50 miles south of Edinburgh, says it has seen around 300 people with such problems since it opened a dedicated cryptocurrency addiction clinic in 2016.
Michael became hooked when his initial investment of £8,000 rose in value to £2.3 million in 2020. However, when the value fell to around £1 million by the end of the year, he became obsessed with getting the value back up .
“I kept reading that it was only going to rise again, and that it wasn’t at its peak yet,” he says. ‘My endorphins spiked and it started to feel like gambling. You never have enough money, but this wasn’t real money because I still hadn’t cashed it in.’
The highs and lows were intense. At one point he bought a $1 coin, which rose in value by 2,000 percent within weeks – and was completely worthless soon after.
“That’s how quickly you feel like the rug is being pulled from under your feet in this kind of business,” he says.
As his income dwindled and the market crashed around May 2021, Michael fell behind in his hospitality job, skipping meetings to trade.
His younger brother eventually intervened and forced him to sell around £80,000 of his crypto holdings in one go. Michael contacted the National Gambling Helpline and was referred for support.
‘I feel very lucky that I got help when I did. I could so easily have lost everything: my wife, my boys, my job, and all our money. I hadn’t realized that cryptocurrency trading had taken over my life and could have ruined it.”
Cryptocurrencies have been around for more than a decade and aim to provide a so-called digital currency independent of central bank interference, with faster payments recorded online using blockchain technology. Its best-known and oldest version, Bitcoin, and rivals like Ethereum captured investor attention and saw wild price increases in the low interest rate environment of the early 2010s and the pandemic.
As many as ten percent of adults in Britain have owned cryptocurrencies, according to a 2022 HM Revenue & Customs survey. Most will have experienced huge rises and falls in the value of their holdings.
A single Bitcoin could have been bought for a few dollars in 2012, but rose to nearly $20,000 in 2017 and a high of $70,000 in 2021, thanks to interest from banks and hopes that Bitcoin would be adopted as a form of payment in stores. It then fell to just over $16,000 in late 2022, decimating the assets of millions of traders.
The extreme volatility has continued, with Bitcoin surpassing $46,000 last month as the US Securities and Exchange Commission (SEC) gave Bitcoin more legitimacy by approving the launch of Bitcoin exchange trading products for US investors. It has since dropped to about $42,000.
Cryptocurrencies are unregulated, so there is no one to complain to if you lose your money. Critics and regulators also warn that there is a high risk of scams and cyber attacks.
Some users have made profits from Bitcoin or other digital currencies, but there are warnings that trading them is more of a gamble than an investment, leaving hundreds hooked and suffering huge losses.
GamCare claims there is a link between harmful gambling and crypto trading. The National Gambling Helpline has heard from hundreds of young adults who have suffered panic attacks after losing £50,000 on deposits or setting up secret bank accounts to fuel the cryptocurrency trading habit.
“For many consumers, cryptocurrency purchases are a way to diversify their investment portfolio,” said Raminta Diliso, financial claims manager at GamCare. ‘However, what we have seen in recent years with the National Gambling Helpline is that serious harm can occur if it goes too far, and it is not always the get-rich-quick opportunity that some people might think it is. ‘
Tony Marini, senior specialist therapist at Castle Craig, says it is often linked to other addiction or behavioral problems. He says the lack of regulation of cryptocurrency is dangerous because people can become addicted and not get the same protections as other forms of gambling, where companies let people set limits on their apps.
Gambling websites contain information and warning messages to prevent people from becoming addicted. There are no requirements for cryptocurrency platforms to do the same.
The cryptocurrency clinic’s first patient came in to be treated for drug and alcohol addiction, but it turned out he had made £750,000 trading Bitcoin and then lost £1.5 million on other forms of gambling and drugs bought on prescription to stay up later and act.
Another had mental health issues after losing the codes needed to access his Bitcoin portfolio.
“The highs are the same as those of a gambling addict and cocaine addict,” says Marini. ‘It hits the pleasure part of the front of the brain and you’re always trying to hit those highs, which often means chasing losses.
‘It’s just another form of gambling, but harder to spot. For example, you see a drug addict or alcoholic walking down the street, but a commercial addict is stuck behind a computer screen.’
Experts warn that the 24-hour nature of crypto trading could cause problems.
Mark Griffiths, professor of behavioral addiction at Nottingham Trent University, says any form of investing can be addictive, but what matters is how often the activity is done.
“The thing about crypto trading is that people can do it regularly throughout the day, while some other forms can’t be done on an hour-to-hour basis,” he says.
‘It won’t be addictive for everyone, but in general the more something can be done, the more it can be associated with problematic behaviour.
‘It is similar to other forms of gambling. Therefore, you cannot get addicted to playing the lottery because you only get to know the results once a week. Slot machines can be addictive because you can gamble as often as you want.
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