For Stewart, 35, from Manchester, it was only when he lost £70,000 in trading cryptocurrencies that he slowly began to realise he had a problem. A gambler since his teens – addicted to roulette and football – aged 30, he began the process of recovery with Gamblers Anonymous. But after hearing people talk about cryptocurrency, he decided to make an investment.
“Initially I put down £1,000 [on Bitcoin] and it doubled quite quickly,” he says. “But I then switched to XPR – another currency – put down £4,000, but then lost a lot of potential money as I took it out before it went up. That made me annoyed so I kept going back.”
Stewart found himself checking his crypto investments night and day, sometimes waking up to find 20 per cent had been knocked off his money. The investments left him anxious and secretive, constantly on his phone and unable to sleep through worry.
He also began paying for crypto ‘signals’ – advice from professionals who track the markets. He felt swayed to leverage or borrow more money to trade. “Eventually, I took out a £5,000 bank loan. I gave it to this guy to trade and he lost it in a single day. That’s when I had to tell my wife. I still didn’t think I was gambling or addicted. I thought I was investing.”
Stewart’s story is far from unique. He is in fact one of a growing number who have fallen victim to the buzz of trading in cryptocurrencies. Currently, there are around 2,000 different crypto currencies – essentially digital money that is not issued by a bank – sold on more than 20,000 different sites. The issue is – according to experts – a “ticking timebomb”. But why?
Part of the issue is that cryptocurrencies are now increasingly mainstream. Roughly 20 per cent of UK adults having bought them at some point, according to comparison site Finder. These currencies can be traded and invested but are known for their volatility – meaning (like lots of investments) they can go down as well as up. This volatility is primarily down to them being relatively new assets, poorly understood and unregulated.
But it is this volatile nature that can make them very appealing to those with addictive dispositions, says psychotherapist Anthony Marini, one of the UK’s leading experts in this field.
Marini is now head of the gambling, gaming and cryptocurrency trading behavioural addiction therapy programme at Castle Craig Rehab centre, near Edinburgh. Castle Craig received its first crypto patient in 2016. Since then, Marini has treated more than 200 people – mostly men aged between 25 and 45 – via private funding or NHS referrals.
“Many people start trading crypto as it’s so easy to do,” he says. “But it’s volatile nature makes it very appealing to those with obsessive minds. It’s also available 24/7, easily accessed in secret and there’s no education, so it’s just a ticking time bomb.”
Of the 200 people he has helped, he has noticed common themes. Typically, a person might start buying cryptocurrencies in order to spend on the dark web – perhaps buying drugs or sex. Some might already have a problem with existing addictions in other areas, and frequently social media plays a huge part in fuelling their crypto spending – with investors gathering to swap tips and post about their success stories, making the trader “feel part of something”.
Often – explains Marini – someone might start with an occasional trade and win – which feeds a dopamine craving in their brain and then leads to fantasies of bigger successes. But once the brain’s reward system is hooked, the person may start checking the markets constantly, then begin to feel anxious.
During losing episodes, the person may become isolated and withdrawn, or at worst take their own life, as has been reported in South Korea. “When people lose, the sense of shame, guilt and self-loathing can be immense,” Marini says. “People beat themselves up and can become depressed or use drugs to cope. Loved ones too are often in the dark. This is a hidden problem.”
Castle Craig works on a 12-step programme – just like with drinking or other addictions. “This is an illness, and just like with drinking and gambling, [it] starts with recognising and understanding the problem,” he says. “Crypto is unique though as people really do think they are trading and investing. They can be very shocked when they are told they’ve been gambling.”
These findings are echoed by the Paracelsus Recovery Centre, based in London and Zurich in Switzerland. Described as the world’s most private and discreet addiction clinic, therapists there received their first crypto client five years ago, with inquiries in recent years rocketing.
CEO of Paracelsus, Jan Gerber says: “In terms of addiction, crypto is somewhat more dangerous than gambling as it has an air of legitimacy. There are financial analysts and legitimate investors, so this makes it easier to stay in denial when a problem develops.”
Viewing crypto as being “as addictive as hard drugs,” Gerber says whether it becomes a bigger problem depends on whether cryptocurrencies will remain niche or grow in prominence, and whether regulators step in – something which he calls for.
Such regulation – like with on and offline gambling – could potentially limit access and mandate addiction-prevention mechanisms. Gerber warns: “Health warnings are essential because when we see such a warning, it sends a signal to our brain telling us to watch out. Without adequate awareness and regulation, cryptocurrency addiction could become an epidemic within the next few years.”
Jane*, 32, who was treated at the Paracelsus clinic, blames the lack of warnings for her addiction. Coming from a family of commodity traders, she was encouraged by her brother to invest in late 2017. She says: “I invested £200,000 in ETH and it nearly doubled in price. I felt like I was on cloud nine. But then I become obsessed with everything crypto-related.
“I stopped sleeping, withdrew from my family, and carried on trading after losing money to gain it back. I even had a massive falling-out with my brother over nonsense, just so I could justify no longer talking to him about my trading habits.”
She also became “obsessed” with stories of people who had lost all their money, only to win it back in one big trade. But her secretive addiction took a toll on her relationships, with her husband believing she was having an affair.
“Looking back, I still feel angry that there were no trigger warnings,” she says. “I was apprehensive at the beginning, but then there was so much aggressive advertisement on social media. I kept telling myself, if this were truly dangerous, there would be warnings.”
Jane* only admitted her problem after realising she was lying to her mother about why she needed money. But by then she had accumulated large debts with family and friends. “It was excruciating coming to terms with what I had done.
“I was in a dark hole of depression and self-destruction. [The clinic] essentially saved my life, explained why I had become so wrapped up in trading and helped me understand it wasn’t my fault.
“I truly believe there are hundreds of people out there who, like me, feel afraid, ashamed and alone because of their cryptocurrency addiction. It is so important to raise awareness and educate people about this wolf in sheep’s clothing.”
*Some names have been changed
GamCare offers free information, support and counselling for problem gamblers in the UK. It runs the National Gambling Helpline (0808 8020 133) and also offers face-to-face counselling.
The Samaritans helpline; on 116 123
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