Reporter
Rachel Wolfson
Reporter
Rachel Wolfson
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Crypto markets are infamous for their unpredictability. Bitcoin (BTC) can surge by 20% overnight, only to lose the same amount by the morning. Traders, tethered to price charts and social media feeds, often find themselves caught in an endless cycle of hope, fear, and regret.
It therefore shouldn’t come as a surprise that recent studies have found crypto trading to have a huge impact on mental health. An in-depth review from the National Library of Medicine (NLM) states, “Cryptocurrency trading seemingly mirrors the high-risk, high-reward nature of gambling, and may cause significant psychological challenges to traders.”
The report from NLM studied 11,177 participants across multiple countries. Based on behavioral traits, the report believes that crypto traders are more prone to anxiety and depression linked to negative outcomes. Traders may also exhibit elation associated with gains, along with addictive behaviors that may perpetuate trading despite losses.
NLM’s study further found that cryptocurrency traders showed higher levels of psychological distress, stress, COVID-19 anxiety, and perceived loneliness compared to non-investors.
Crypto Traders Struggle With Extreme Losses and Suicide
Unfortunately, this may very well be the case. Following the largest crypto market crash in history – in which $19.36 billion was liquidated from the market in just 24 hours – there were reports of thousands of crypto traders taking their own lives.
While there isn’t actual data to back up these claims, one of the biggest stories following the market crash was that Konstantin Galich, otherwise known as Kostya Kudo, had taken his own life. The 32-year-old Ukrainian crypto investor had been found dead in the passenger seat of his Lamborghini in Kyiv shortly after the market crash.
Other stories circulated on Reddit and social media platforms like X, where crypto traders mentioned “how they lost everything” and that “they couldn’t tell their families.”
Even if these outcomes were not as tragic as Kostya’s, the symptoms crypto investors face are likely similar. To put this in perspective, a 2023 global meta-analysis found that people under financial stress are 74% more likely to attempt suicide.
Raising Awareness For The Crypto Industry To Do More
Given the high suicide rate linked to financial stress, it has become apparent that the crypto industry must do more to promote discussions around mental health and wellness.
David Kemmerer, co-founder and CEO of Coinledger – a crypto tax software solution – told Cryptonews that he used to check Bitcoin charts from the very moment he woke up.
“It feels thrilling, then over time, it wears you down. There is no resting and the chronic arousal accelerates decision fatigue and anxiety,” Kemmerer said.
He added that crypto trading is very similar to gambling, particularly when it comes to chasing losses. “Small wins are seen as reinforcement and it is common to want to recover after a loss. This pattern increases risk for addiction behavior and mood disorders.”
Moreover, Kemmerer believes that crypto traders often tie their portfolio to their character and self-worth.
“When markets surge, it is a win for them, and instead of them considering it a financial loss, it becomes a personal failure as well. There are no boundaries in this sector, and emotional ups and downs result in anxiety, burnout and depression since failures feel like character flaws. In some cases, the depression escalates to suicide,” Kemmerer stated.
This being the case, Kemmerer pointed out that it has become critical for the crypto sector to focus on mental health. “Everyone in the industry should encourage conversations around trader well-being. If possible, it should be a standard, like security audits and compliance checks,” he said.
Although mental health and wellness is still not widely discussed in the crypto sector, there are ways for the community to improve this.
According to Kemmerer, crypto exchanges and platforms can start by encouraging users to take breaks after high trading activity. He added that crypto platforms could also redirect traders to mental health resources during market crashes.
“For example, these platforms could add an order delay toggle to increase the cognitive cost of impulsive trades. Another example is a dashboard with a reality check modal for >X% drawdown, that requires a pause and shows tax/realized loss projections,” he said.
Shira Lazar, a mental health expert and founder of Creators 4 Mental Health, told Cryptonews that awareness and boundaries are key here as well.
“Just as people track their portfolios, they need to track their mental well-being – how much time they’re online, how reactive they are to market swings, and whether they’re still finding joy in what they’re building,” Lazar said.
Lazar added that best practices to ensure mental health include taking breaks from screens, creating set “trading hours,” and grounding oneself in community or offline activities. “Mental health isn’t separate from innovation – it’s what sustains it,” she said.
Additionally, crypto investors suffering from addiction and life threatening thoughts may also consider seeking out 12-step programs, similar to those used for gambling or alcohol addictions. A recent article from the mental health publication FasPsych notes that a 12-step program called “Bitcoin Anonymous” can offer community support for those struggling with Bitcoin trading addiction.
B.C. Kowalski, founder of the FrugalBC YouTube channel, further told Cryptonews that the crypto ecosystem has great communities that can provide help around this topic.
“I am active in Algorand communities and starting to become more active in Hedera communities,” Kowalski said. “I think sharing personal experiences with others in the same boat can have a tremendous impact on one’s mental health. Others might have solutions to your problems or, if nothing else, having other people going through the same thing always helps – at least it has for me.”
Seeking Help
If you or someone you know is struggling, help is available. In the U.S., call or text 988 for the Suicide and Crisis Lifeline. In the U.K., contact Samaritans at 116 123. In Canada, call or text 988 (nationwide).
