Can Crypto Trading Be Addictive?

controlling their crypto trading. Today, I'm joined by two Bloomberg reporters, Claire Valentine and Charlie Wells. They've both written about how some crypto traders and equity traders have experienced the spiral from temptation to desperation. So Lights is to be joined today by not one, but two Bloomberg reporters. We have Charlie Wells joining us from the London office, but he's actually in New York this week, and Claire Valentine, Hello

do you both? Hello? Hello? So we're gonna talk about a slightly heavier subject than we may necessarily have discussed in other episodes. You know, where we've talked about regulation or what's happening in Congress. But today we're going to talk a little bit more about crypto addiction. And Charlie, you wrote the story I remember when you first emailed about it about folks who are checking themselves into rehab because they are finding it hard to control their you know,

crypto treating activities. Can you talk a little bit more about that and what you found in the story? Yeah, so I think, you know, this really kind of started with wondering, you know, can you actually be addicted to cryptocurrency? Because we hear people use the word addiction very loosely, and it's a serious It's a serious topic, right like this, addictions can ruin people's lives, um and we wanted to

know is is crypto addiction real? Is Are some of these re have centers that have been popping up on both sides of the Atlantic and many parts of the world. Are they legitimate? Are they serving some sort of purpose? And so what we did was we looked at some of these treatment centers. There's one in Switzerland where, of course in Switzerland, where a colleague went, they charged nine thousand dollars a week to treat the ultra wealthy who

may have may have cryptocurrency addictions. There's one in Scotland, there's one in Maryland. There's a number of online providers. Now. I think the hard thing for the story, for reporting the story was finding people who say they are addicted to talk to us. Because it's hard, it's it's embarrassing, it's hard. It's a serious part of life, um. And I think one of the striking things is I found somebody in a corner of Reddit called butt coin, and it is a place where people gather to talk trash

about bitcoin. And one of the people on there said, hey, look, um, I was addicted to to bitcoin and cryptocurrencies. Coming here talking trash about it was really helpful, thank you. And so that was one pathway that I went to find somebody. But it was an interesting journey. It does indeed sound like an interesting journey. One of my questions about that is when that person says, hey, I was addicted to this, what do they mean? What is that manifest as? That's

a really good question. And for him it was interrupting his regular life. He was trading when he got up in the morning instead of playing with his new child. He is a religious person, he wasn't praying as much as he wanted to UM, and so it seemed like he just couldn't control his behavior and wanted that to change.

He didn't go to a rehab center, but a lot of the kind of tendencies that he talked about in the behaviors aligned with what some of our experts that we spoke with UM said could potentially be cryptocurrency addiction. Because this is where I think it's important for us to just pulls and kind of reflect on what you said at the top, which is people throw the word addiction around a lot, right they you know, I'm addicted to coffee. You know you like coffee. That's it's not

the same. And so when somebody is getting to the point where they're being they're either self diagnosing or being diagnosed as having cryptocurrency addiction, it sounds like you're saying that some of these behaviors include things that really interrupt their normal daily activities in ways that are having harmful

and potentially long term consequences. Yes, that's exactly right. So you know, one of the things about cryptocurrency is it is legitimate, right, there are people who make legitimate money, working incredibly hard, incredibly long hours doing this, and what was striking to me was one therapist said, you know, look, there are so many, you know, millions of people who trade crypto. If DOE we're as addictive as some might suggest, there'd be millions of people who are addicted, right, So

it's a small number of people. And I do think, as you say, it's it's when it's interrupting, um, your

daily activities in ways that you don't want. What was really striking with speaking with another person being treated for this in a Scottish clinic, and he said that he had this realization at one point when he was taking kind of excessive risk in markets, was that he would start with, you know, a small amount of money, bring it up to maybe a hundred thousand dollars worth of whatever asset that was, and then he'd lose it again. And he kind of had this realization that was like, oh,

maybe I don't actually want the money. Maybe I'm just doing this for the thrill. Well that sounds like gambling, yeah, And I think that brings us to a really interesting point, which is that you know, there is not an official designation in the Bible of psychiatry Um the d s M five yes, there's not an official cryptocurrency addiction, but what gambling professors and researchers said is that this really aligns with gambling disorder, and gambling disorder was recently added

to this Bible of psychiatry um controversial Bible of psychiatry. Yes, controversial Bible of psychiatry, and it kind of reflects this moment where we're at, where behavioral addictions are getting more attention by the psychiatric community. Claire, I want to ask you a little bit about gambling and finance, because you have covered meme stocks, and you have covered the ways in which, for a moment, perhaps less so right now, trading.

These things seemed to take over people's lives. They definitely took over the media conversation. But there were lots of people, you know, also want to reddit, not necessarily in but coin, but there's another subreddits where people were saying, you know, they're they're not sleeping, they're staring at screens constantly. They

feel like they're taking excessive risks. Are you finding any similarities in these um, I suppose novel behavioral expressions of perhaps older forms of you know, dependencies that we develop those people. Yeah, absolutely, and I think UM so much of it has to do with this current moment that we're in, both with cryptocurrencies gaining popularity. UM partially fueled by UM when people were bored during the pandemic, and I think a lot of this originated with that when

people were locked down. This was a way to have community, to do something with your time besides sitting and being bored at home. Yes, and so you know, anything that could give people a thrill UM And then you know, so maybe this started out with stock trading on robin hood Um, which also has come under some scrutiny for its addictive qualities. And then, at least in my own reporting, people that I've talked to move from stock trading to crypto,

and so that's just sort of accelerates this pathway. But I think there is you know, there's excitement around it, there's a community around it, and at least for a bit there, you know, now that we've seen both crypto and stocks tumble, it's changed a little bit, but it's everywhere. I mean, I take the subway every day and you can't do that without seeing a crypto ad. You know. Thinking about like the Super Bowl, almost every ad had

something to do with crypto. So it's, um, it's an easy environment I think for people to stumble into it and for it to be something that really appeals to them. And what I think is so interesting about that, And I'm glad we have managed to sort of join up the gambling and the marketing conversation, because you know, gambling is a relatively heavily regulated activity in a lot of places. Your ability to willfully lose money is pretty constrained. Uh,

you know, there are rules that vary by states. And some of the more recent conversation has been around Okay, hang on, you tell me I can only get well if I go to a casino, But now I can do sports betting, or I can do way more things on my phone where it's it's really easy and some of the friction of having to go to a physical place or removed. And you know, so folks are asking about the wisdom, as it were, of making it easier

to do different kinds of betting and of gambling. But almost none of that conversation has been applied to crypto yet, or even to stock trading. Have either of you seen anything or seen this conversation evolving to include crypto and stop trading in that In that sense, I think what I have seen mostly is there's this question of how much should it be regulated because and it comes up in gambling as well. You know, there's uh the concepts

of free will and people should do what you want. Yeah, exactly, there's you know, your agency, and you should be allowed to lose money if you want to with gambling, and I do feel like that's moving over to stock trading and crypto, and I remember, you know, when retail and dressers were first getting into the market, they are these conversations of you know, they're losing money, like when does the SEC need to step in? But then some traders

themselves were I don't tell me what to do. If I want to lose money, I can lose my money. So it's this interesting, you know, sort of discussion about how much do regulatory agencies both need to step in and should thank you both, We'll be right back. How were you able to find reputable people treating crypto rehab in this environment? Good question, because I think that we really tried to bring a sense of skepticism to this.

You know, the clinics that we spoke with, do have you know, licensed therapists who are who are employed, who use methods that might be similar to gambling addiction to you know, more well known addictions. And so I think that was one way that we felt that, you know, we were speaking with people who are at least somewhat legitimate. I think that when you look at some of the excesses around some of the treatment, so that particularly very

expensive treatment. Yes that you know, I think there was a whole wellness element to this, and you can see how it could go. You could go maybe quite far um. And you know, I don't think we would want any person who was struggling with this to think, Okay, I need to shell out thousands of dollars to go somewhere. Um. The main character in the story quit cold Turkey. So I think that being cautious here is really important. Claire, any thoughts on in addition to us all all being

cautious in what is a very complicated topic. You know, you mentioned this idea of free will and of agency, and you know, Charlie, you didn't use this word, but there's a lot of libertarians in crypto right there. There are a lot of people who are like, do not tell me what to do in any part of my life, and especially you, the government's sovereign state that I don't trust to start with, don't tell me how to how to deal with my money. Do you think that or

my my non fiat? Do you think that hasn't any way complicated what could otherwise be fruit full conversations for people who might be struggling or for people who might have questions. I think definitely. And I think that you know, even this discussion around what is addiction can be uh one of the reasons why people who need help maybe don't get help. They don't realize they have an addiction, or they you know, they think they don't even know

about options for treatment. And and I do think that there are lots of people out there who think they should be able to do whatever they want and that if they lose money, it's on them. There shouldn't be rules around it. And I think that it's all kind of connected, right, it's our current political atmosphere, and it's um, you know, how much government oversteps should there be, how much regulation should there be? And so it's you know, and and there are lots of different kinds of people

that trade. Crypto is a thing. I mean, there's definitely a stereotype of, you know, a certain kind of crypto trader, but there's there's many of them, and so I think that it varies based on the person, why they're investing, what their mindset is around it. Um. But I do think for many of them, you know, they would be appalled at the idea of people taking away their their

right to trade this as much as they want. You know, Charlie, when you when you were doing reporting, did you find that these the folks that you were talking to are the folks who identify themselves or for what the experts saying. Were there similarities about them? Were they were they already in treatment for other things? Was this more of a

manifestation of other stuff that was going on? And where there are people who were like, I'm totally fine everywhere else it's just crypto that really kind of hits the nail on the head here, which was both of the people that we quote in the story said they kind of had, you know, compulsive personalities. They knew themselves, and I thought that that self knowledge was really refreshing. Um to have people say, look, I know that I am quite compulsive. One of the men that I spoke with

in the UK had drug and alcohol problems. One of the therapist at a treatment center said that often, you know, people don't come to his center for crypto addiction. They come because they're struggling with other addictions, maybe substances, and then as they're unpacking what might be going on, you see other addictions as well, and so that was the

case with with this man. One of the I suppose one of the other questions that I found when I was reading a piece is like, how would you know right and do the signs manifest pretty much the same as if you are getting diagnosed as somebody who may have an addiction to gambling or to other substit says in talking to those experts and those therapists, was there anything they said that was sort of a unique to the manifestation of people who have, you know, come out

as addicted to crypto or was it more like it looks like these other things you see. Yeah, So I think what was striking to me here was it's not just about losing a lot of money or earning a lot of money. And so some of these addicts said, oh, yeah, sure, it's thrilling to win a lot, but it's also really thrilling to lose a lot. And it's that like, whoa, I've lost control. Um that you know seems to trigger some reward mechanisms in the brain. Um. How do you know? Though?

I mean, I think if you are being hurt, I think financially, that would probably be a sign. UM. I think one of the things that we've been touching on here is just this culture of not wanting to be told that you might have a problem. But I think if people who you do trust two are telling you that you know, this could be a problem, maybe that there's a there's an indication there to to listen. Um.

But it all seemed to be unique. I think there wasn't necessarily one sign like bang, you're addicted to crypto. You know. One of the things that has happened to retail investors in addition to equities going down is there was a lot there were a lot of people who were very exposed to Luna and Terra, and and those folks were sharing some very sad stories, um, you know, on Reddit, on Twitter and other forums about what they

had lost. And I didn't notice there was something about the severity not just of the collapse, but of the reaction that it was one of the first times that I really saw mental health and people asking like are you okay? Not just is your wallet okay? Is your account okay? Like are you the person behind the pseudonym doing okay? And you know, there there were there were definitely signs that this had been pre existing, like fairly

close knit community. But it is it's heartening that at least in some of the darker times that folks are experiencing in markets, that there is community out there for them.

I think that's a really good point, and I think it's important for us remember, you know, there's real people behind these trades, and we live in an atomized media environment where some people might be getting good information, some people might not be, and some people are making choices based on the best information that they have and that may have been to do these investments that people in their peer groups were telling them to do because it

seemed great. Um, And they've lost a lot of money, right, And that has a serious impact on mental health. And I think it's it's one thing to say, oh wow, crypto addiction, how funny is that? But it's it's serious.

Um And so I'm glad we're having this conversation. And I think too, you know, in a down market kind of like what we're starting to experience, and you know, make it worse, there is more sense of empathy that comes out for people, and so, you know the difference between someone losing a lot of money on Big Tex stocks, which is more mainstream versus crypto suddenly becomes kind of similar, and it's all like we all kind of lost money. We're sort of in this together. Yeah, sometimes group think

can be good. All right, Well, thank you both for joining me. I really appreciate you taking the time. Thank you, Thank you. You can find more of Charlie's reporting and of Claire's reporting on the Bloomberg Terminal on Bloomberg dot com, and you can find them both on Twitter. Charlie is at Charlie w Wells and Claire is at CFB Underscore eighteen. On the next episode of Bloomberg Crypto, do you have any beach vacation plans coming up? What if you could

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