If you have a friend who’s “into crypto”, then now is the time to check in on them. In late January, prices of Bitcoin and Ethereum, two of the most popular cryptocurrencies, plunged to levels that many experts never predicted, and memecoins like Dogecoin were dragged down with them. Countless people have watched thousands of pounds disappear before their eyes.
This was a sudden shock rather than a slow burn. Bitcoin reached an all-time high of around $69,000 (£50,850) in November, but then dropped over 40 percent within a few months. As a whole, the crypto market has decreased in value by more than $1 trillion (£737bn) since Bitcoin’s peak, but has shown signs of rallying in the last week or so.
Many experts have touted crypto as a democratised form of Wall Street investing, with the prospect of financial elevation awaiting anyone who dares to join the party. But in reality, it only seems to have panned out for a select few. Many crypto-investors are ordinary people taking a risk with their life savings, rather than elite traders who can swallow sudden losses. A recent CNBC survey of 750 crypto investors found that a third actually knew very little about what they were investing in. The question is: What happens to these people when they lose big?
Experts like Peter Klein – a cognitive behavioural psychotherapist who offers CBT for cryptocurrency-related mental health issues – have warned that the market crash will have caused an “increase in the severity of the crypto addiction symptoms that people are experiencing”. It seems like this fast-growing investor community is generating its own fast-growing mental health crisis.
Hashim Yasir, 19, is a NFT project founder and crypto trader who lost “a good amount of money” in the recent crash. He tells VICE that it affected his mental health for some time: “[Up until then] I felt like I was finally getting pretty confident with this new skill, but it really felt like the market was officially going to drop to zero.”
His dealings with crypto and NFTs resulted in “sleepless nights and constant stress and anxiety”. It changed the way he acts and interacts with other people and “has led to me becoming very short-tempered,” he tells VICE.
Contrary to the frequent declarations that investing is an everyman route to wealth and happiness, interviewees told me that crypto had nearly ruined their lives.
Sandip Das, 27, is an India-based trader who makes his money by shorting Bitcoin – in other words, betting against the market. He’s profited from the fall in crypto, but says the past year of trading has still taken its toll.
“I barely sleep three to four hours a day, which results in me making serious errors in the market,” he says. “I’ve also started developing pain at the back of my neck and shoulders due to high levels of stress.” Das has bipolar disorder, and says crypto has been tough on his mental health. “Crypto will wreck you emotionally and physically,” he warns. “You will get scarred for life.”
One man – a 33-year-old from Russia, who asked us not to share his name – told me he feels addicted to crypto, and is stuck in a cycle of trying to recover his losses but only losing more in the process.
He first began investing in November 2017 – the year Bitcoin experienced a huge surge – and saw some profits, but has now lost his entire life’s savings, totalling £110,000. “Mentally, it’s sickening, because I have not been able to even share this with my wife,” he says. “I’m in a poor state financially and it isn’t the state I want to be in. It’s ruined my world and my mental health… I’ve reached a point of attempting to commit suicide.”
Despite the intense stress shared by some crypto investors, finding a space to discuss these experiences isn’t easy. Across Reddit and Twitter conversations around crypto, there’s usually one reaction to downturns: “Don’t be an anxiety bitch, HODL [Hold on for Dear Life]” – in other words, don’t you dare pull out. Memes regularly circulate that joke about the intense stress and torment that come with investing.
The need to put on this brave face could be down to the fact that voicing your anxiety has a direct impact on the markets, which are essentially a reflection of confidence. Coins go higher the more people invest and drop the more people pull out. Crypto might be anxiety-inducing, but people don’t make money from acknowledging this and actively lose out if they do.
Klein, one of a handful of experts providing counselling for cryptocurrency addiction, began offering this type of therapy in 2017. He mostly treats men and has patients all over the world. He thinks they come to him because of the heightened demand and the distinct lack of crypto mental health support.
“Very often people that trade cryptocurrencies excessively – i.e. every day – often already have issues with anxiety,” he said. “When people have anxiety, they see the world in a more intense way than people without it. And the intensity of the cryptocurrency market kind of matches the reality of how they process the world.”
Like any addiction, crypto can offer people an escape from the world and a short-term dopamine hit at the expense of everything else in their life. Klein tries to help his patients by encouraging them to stop avoiding other aspects of their life, such as getting dressed or socialising. He draws on counselling methods from behaviourism, classical CBT, and modern approaches like mindfulness, to bring them to a more stable place.
One businessman and investor from London – who prefers to be known by his Twitter name @BritishHodl – says that seeing a therapist has helped him understand his anxiety and how to manage the emotional volatility of investing. The experience made him realise that “when you are so focused on markets, and you are an investor, that volatility starts to seep into everything else,” such as relationships and work. “That’s what you’ve got to be careful of, otherwise you’ve ruined your life,” he says.
What about those who struggled during the crash simply due to their financial losses? The advice of Adam Smith, an investor and creator of advice forum The Crypto Advisor, is to “take a deep breath, have diamond hands, and HODL”. He explains: “The near future for Bitcoin, and the crypto market as a whole, is likely to continue to be turbulent while a number of global and regulatory decisions remain unresolved.”
Potential conflict in Ukraine, as well as talks of a ban on the use and mining of cryptocurrencies in Russia, are set to affect the market even more. “If you’ve ploughed your cash into crypto and you’re now seeing its value tumble, it can be an incredibly anxious time, especially if that money is needed elsewhere,” Smith acknowledges.
HODL has become a joke in the crypto space, but that’s exactly what so many investors are trying and failing to do with their psychological wellbeing. Experts say crypto will eventually bounce back – as it often seems to do – but you have to wonder just how much damage will be done to the lives of its investors before it does.