April 2024
Dr Stefan Walters looks at what is sometimes perceived as the mysterious connection between cryptocurrency and gambling.
In a world where fortunes can be made and lost in the blink of an eye, many people are now debating whether cryptocurrency trading should be considered a form of gambling.
Occupational charity caba’s recent addiction research showed that those surveyed are split on whether cryptocurrency and stock trading technically qualify as gambling.
The nature of addiction
To understand this debate we must understand that each individual’s addictive behaviours can have different causes, such as boredom, stress or trauma. Addiction is a complex issue that occurs when you lose control over doing, taking, or using something that damages your physical, mental or financial health.
When our nervous system becomes dysregulated, our brain tries to maintain a balance, and sometimes we adopt coping strategies that may be unhealthy.
The similarities
Cryptocurrency may initially feel exciting and enjoyable, but concerns arise when it triggers compulsivity, obsession, risk-taking and a dopamine rush similar to gambling. Diagnosing a cryptocurrency addiction would be no different from diagnosing any other type. If we conducted an MRI scan, we would observe similar brain regions lighting up, which seek excitement or risks.
Organisations like GamCare have
reported that 43% of problem gamblers own cryptocurrency, and 25% of them want to invest more to recoup their losses. Aligned with this, caba’s recent survey also discovered similar data that almost one in six accountants felt worried about their finances as a result of gambling, while one in nine have borrowed money before or after gambling.
Similar to gambling, cryptocurrency also poses financial and emotional risks that can escalate and get out of control easily.
The differences
Cryptocurrency is considered the latest form of investment, and for some it is like investing in stocks, shares, or real estate. With calculated and informed decision-making, risks can be mitigated, but this is a key aspect of safe trading.
By framing this investment as part of a diversified portfolio with long-term goals and reduced risk through calculated choices, this financial activity doesn’t have to affect your nervous system. Therefore, it can be approached as a responsible investment rather than impulsive gambling.
In February 2023, the government implemented plans to robustly regulate the cryptocurrency industry and promote responsible trading. For instance, crypto companies must offer a 24-hour ‘cooling-off’ period to manage high risks.
How do accountants feel?
Caba’s recent research has revealed that almost two in five accountants (38%) believe that investing in crypto or stocks and shares is a form of gambling. As an addiction specialist, I do not believe that accountants are specifically more at risk of a cryptocurrency addiction.
However, this addiction can be invisible and may feel like an extension of the job for accountants. The addictive patterns of obsessively trading may also go unnoticed for longer by those who are used to analysing finances and spreadsheets daily. Therefore, increased awareness within the financial industry is vital to identify and address these behaviours effectively.
Adopt healthy trading habits
To reduce the risk of cryptocurrency trading turning into an addictive habit you need to cultivate self-awareness regarding your trading habits and patterns.
First, you must check in with yourself and identify what is driving your behaviour. Is it a calculated decision based on risk assessment and pre-approved investment plans? Or is it a distraction from a tough day at work, with minimal research into the decision?
I also recommend setting investment limits as safety barriers, ensuring your hard-earned money is protected. Establishing personal boundaries and sharing these financial choices with your trusted network can help maintain control, promote accountability and encourage open communication about your trading activity.
What help is available?
Many of us face challenges in everyday life, and there is no shame in asking for help at any point in the journey. If you are struggling with addictive cryptocurrency behaviours or addiction-related debt, there are resources available to provide support.
Counselling services and financial support organisations can assist with managing finances and offer guidance for overcoming addiction. Additionally, occupational charity caba offers dedicated physical, mental and financial help for ICAEW accountants, ACA students, and their families.
- Dr Stefan Walters is a psychologist and addiction expert
