Behavioral Addictions in Cryptocurrency Trading

Recent viewpoints suggest that financial activities such as stock market and cryptocurrency trading may fall under behavioral addictions (Youn et al., 2016; Griffiths, 2018). This article establishes a foundation for understanding the behavioral factors influencing cryptocurrency trading and explores its potential link to gambling disorder and addiction. Recognizing the evolving nature of addictive behaviors, this research aims to contribute insights into the intricate relationship between financial activities and addictive propensities within the contemporary economic landscape.

Globalization's Impact on Mental Health and Economy

Globalization exerts a profound influence on traditional lifestyles, ideational transformations, cultural value differentiations, and the disruption of conventional behavior patterns, as discussed by Gagarina et al. in 2019. Among the various domains affected, the economy undergoes substantial shifts in the wake of globalization, widening the chasm between the affluent and the underprivileged while sidelining the middle class, as observed by Musterd et al. in 2017. Unquestionably, the heightened income inequality resulting from globalization contributes significantly to negative repercussions on mental health, as highlighted by Tibber et al. in 2022. Within this challenging context, individuals are compelled to safeguard their assets and seek earnings through prudent investments, a rational response to the prevailing circumstances.

Rise of Cryptocurrency and Its Influence

Cryptocurrency, characterized by its innovative perspective and technological integration, has swiftly garnered acceptance within the financial realm. Proposals suggest that blockchain technology, intrinsic to cryptocurrencies, holds promise as a remedy for addressing income inequality in a free-market economy, a viewpoint supported by Othman et al. in 2020 and Chohan in 2022. Notably, cryptocurrency trading has witnessed remarkable growth, gaining widespread acceptance across all societal segments, even amid the challenges posed by the COVID-19 pandemic, as evidenced.

Cryptocurrency Trading and Gambling Disorder

Gambling, defined as the act of wagering money or valuables on an event with an uncertain outcome, has garnered increased attention in recent studies linking speculative activities like stock trading to gambling disorder (Delfabbro et al., 2020; Grall-Bronnec et al., 2017; Mosenhauer et al., 2021). While stock trading is conventionally viewed as an investment, research reveals patterns and choices akin to gambling disorder, marked by short-term profit motives, limited information, and a focus on high-risk stocks Grall-Bronnec et al., 2017).

Cryptocurrency trading mirrors high-risk investments, attracting individuals with a high tolerance for risk, particularly the younger, more educated, and higher-income demographic (Arthur and Delfabbro, 2017; Mills and Nower, 2019). Recent studies note parallels between cryptocurrency trading and the gambling industry, emphasizing the intertwining of blockchain technology with gambling and the potential coexistence of cryptocurrency trading with gambling disorder (Gainsbury and Blaszczynski, 2017; Scholten et al., 2020; Delfabbro et al., 2021a).

Decision-making and Mental Health

Decision-making in cryptocurrency trading, like speculative stock trading, is considered variable and uncontrollable when based on limited information or lacking strategy and skill (Delfabbro et al., 2021a). Some strategies in cryptocurrency trading overlap with those observed in gambling disorder, as reported by Senarathne in 2021. Notably, individuals with gambling disorders exhibit heightened interest in cryptocurrency trading, with over 50% of regular gamblers surveyed having invested in cryptocurrencies in the past year (Mills and Nower, 2019). Factors predicting cryptocurrency trading include engagement in sports betting, fantasy sports, high-risk stock investment, and a diagnosed gambling disorder.

Associations with Mental Health Issues

Associations between cryptocurrency trading and mental health issues such as depression and anxiety have been documented (Mills and Nower, 2019). Furthermore, a high score on the problem gambling index is indicative of increased cryptocurrency trading, highlighting the interplay between gambling disorder and cryptocurrency engagement (Delfabbro et al., 2021a). With gambling disorder prevalence typically ranging from 0.5% to 2.0% in the general population, the striking prevalence of 9.5% among cryptocurrency traders underscores the need for comprehensive awareness and intervention strategies in this emerging intersection of finance and mental health.

Cryptocurrency Market Dynamics

The cryptocurrency market is distinguished by its capacity to offer investors significant profits within a short timeframe, driven by price volatility, a characteristic highlighted by Delfabbro et al. in 2021. This rapidity, often measured in minutes and hours, fuels the prevailing belief among crypto investors that substantial profits can be maximized through their investments (Pezzani, 2018). The allure of cryptocurrency volatility, akin to the thrilling effects of playing slot machines, can engender a powerful impact, leading some investors to become intensely preoccupied with price movements, overspend, and sacrifice sleep to incessantly monitor the market (Mills and Nower, 2019; Kim et al., 2020). Noteworthy traits observed in individuals engaged in this activity include impulsivity, fear of missing out, novelty seeking, and heightened self-confidence but diminished self-control (Kim et al., 2020; Sudzina et al., 2021).

Salience and Addiction Model

Salience, a key component in the addiction model, manifests when thoughts predominantly revolve around a behavior and its outcomes, potentially causing individuals to neglect other vital life responsibilities. In the context of cryptocurrency trading, the constant monitoring of online media and applications due to market developments and volatility accentuates the salience aspect (Dixon et al., 2018). Distinctive factors such as internet accessibility, global transaction capabilities around the clock, absence of stigma, and anonymity differentiate the cryptocurrency market, contributing to individuals dedicating a substantial portion of their time to crypto transactions, thereby disrupting work, family, and social obligations.

Tolerance, Relapse, and Mood Modification

The escalating need to invest more time in trading or explore new financial instruments, coupled with the desire to trade larger sums to recapture previous excitement, aligns with the concept of tolerance in addiction. Persistent, unsuccessful attempts to control, restrict, or cease trading indicate the relapse dimension of addiction. Loss of interest in previous hobbies and

activities, an inability to derive enjoyment from other facets of life, heightened stress with losses, and increased trading to compensate point toward mood modification in the context of addiction (Guglielmo et al., 2016). The intricate interplay of these factors underscores the potential development of addictive tendencies within the realm of cryptocurrency trading.

Conclusion: Evolving Landscape of Cryptocurrency Trading

Cryptocurrency trading, despite its recent inception, has significantly altered the landscape of the financial world. Positioned as the currency of the future, cryptocurrencies are increasingly adopted as a substitute for traditional money in various global regions. Their rapid rise has captivated widespread interest, resulting in a daily surge in the number of investors. However, despite the accelerating pace of adoption, studies investigating the behavioral and psychological factors influencing financial decisions, particularly within the domain of cryptocurrencies, remain relatively limited. The burgeoning field of research on cryptocurrencies is still in its early stages, reflecting the evolving nature of this dynamic and transformative financial phenomenon.