Joel Frank
Cryptocurrency markets, famed for their volatility, are not for the faint-hearted. Small-cap coins relating to new and/or relatively unknown crypto projects/protocols can experience exponential gains and losses in very short periods of time.
While there certainly are plenty of gems to be found, cryptocurrency markets are awash with scams and fraudulent/failing projects. Buying the wrong coin can result in an investor swiftly losing everything.
Even the major coins like Bitcoin and Ether, both established viable protocols with an army of users, supporters and developers, experience significant volatility. From its 2020 low to its 2021 high, the BTC price was up nearly 1,700% (i.e. 18x). But from its 2021 high to 2022 low, the world’s largest cryptocurrency by market capitalization lost around 77%.
While cryptocurrencies like Bitcoin, Ethereum and others hold the promise and arguably are in the early stages, of building a new, decentralized and independent financial system, the high degree of risk in the market remains a key factor deterring non-crypto-educated investors.
However, while high levels of risk and volatility might deter some investors, it gets others juices flowing. The crypto world is full of stories of early investors getting rich after sinking a few grand into what would become “the next big thing”. Just look at the stories of early Bitcoin and Dogecoin investors, and those who got in on the Ethereum presale.
Sophisticated investors see huge opportunities. By conducting extensive research, they may be able to identify fantastic risk-reward opportunities, either on short or long-term crypto investors. Traders who excel at a combination of technical and fundamental analysis might also be able to make a decent chop betting on price swings.
Cryptocurrency Market Volatility Attracting Gamblers
But crypto markets are increasingly attracting a new crowd. Those who don’t want to do the due diligence and research, but just want to gamble. As ever, the gambling crowd are attracted by the prospect of making big monetary gains without doing much (or any) work.
And this is a growing problem. In most countries, the official gambling industry (like online Casinos and Sportsbooks) are heavily regulated – i.e. offering punters the means to set limits on how much they can gamble and referring to experts who can help with addiction.
But cryptocurrency markets remain largely unregulated in most countries in the world. And a growing number of crypto traders and investors are finding that they need help from gambling therapists.
Take Scotland’s Craig Castle rehabilitation center. Since 2016, it has diagnosed and treated 250 patients with a crypto gambling addiction. According to Tony Marini, who works at Craig Castle as a therapist, there has been a sharp rise in the number of crypto gambling addicts in the last few years, most of them young men, with isolation as a result of the pandemic thought to have contributed.
“Over these six years, I’ve really done a lot of research and spoken to a lot of people that do it and I find that it takes them to exactly the same places where gambling does”, Marini commented.
“The isolation, the fantasies about making money, being able to get the fast cars, the big houses, and then that depression starts to come in… You know, they crossed that line into the addiction and they isolate away from everybody,” he continued.
According to Marini, one of the big problems is that many people slip into a crypto-gambling addition without realizing it. The UK has a begamblingaware.org website to help vulnerable people. But there is no such becryptoaware.org website.
“People don’t think they have a problem with crypto… the people using crypto don’t know they’re gambling… because it’s not regulated,” Marini remarked.
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This article was written for Business 2 Community by Joel Frank.
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