Is Crypto Gambling?
Published:
Jul 14, 2023
Key points:
Similarities between crypto and gambling include speculation, lack of regulation, and potential for addiction, with stories of recovering gambling addicts falling back into bad habits through crypto investments.
Differences include the possibility of long-term tactical investments in crypto and the potential for it to be a wise part of a diversified portfolio.
Signs of a crypto trading problem include obsession, neglecting responsibilities, financial difficulties, emotional distress, and social isolation. Seeking help from mental health professionals, support groups, addiction helplines, and financial advisors is recommended for those facing crypto trading addiction concerns.
The Difference Between Cryptocurrency and Gambling
With the rise of cryptocurrencies, there are many stories about people getting rich quickly and just as many stories about people losing it all in the blink of an eye. The volatility of crypto has people likening it to gambling. On the other side of the (bit)coin people say that crypto is a sound investment. So, is crypto gambling? There are some similarities and some differences. Ultimately, there’s not a clear answer to the question, is crypto gambling? However, people can invest in crypto to the point where it becomes gambling and they’re at risk of jeopardizing both their financial and mental health.
What is Gambling?
Gambling is any game or activity with an uncertain outcome where a person risks either money or another item of value with the hopes of winning more. Betting money on sports, horses, or playing cards for money would count as gambling. Even buying a lottery ticket could count as gambling.
What is Cryptocurrency?
Cryptocurrency or crypto is a digital currency. Unlike a bank, crypto transactions take place on a decentralized network called the blockchain. The first cryptocurrency was Bitcoin. Since 2009, when Bitcoin was created, over 22,000 other cryptocurrencies have come into existence.
Cryptocurrencies offer several advantages, including faster and cheaper cross-border transactions, financial inclusion for the unbanked, and greater user autonomy. Additionally, they have sparked innovations such as smart contracts and decentralized applications (DApps), revolutionizing various industries like finance, supply chain management, and gaming.
However, the volatility of cryptocurrency prices, regulatory challenges, and security risks pose significant concerns. Understanding the fundamentals of cryptocurrency is crucial for individuals looking to participate in this digital economy and navigate its opportunities and risks.
Crypto and Gambling Similarities
Investing in cryptocurrencies may seem like investing in the stock market. However, there are some key differences. Like gambling, crypto involves a lot of speculation. All of the coins people trade are not regulated or backed by a financial institution. Unlike a publicly traded company, there are no earnings calls or transparency into the stability of the asset. Recently, large crypto brokerages like FTX have folded, showing how uncertain the industry can be.
There are stories of individuals who are recovering gambling addicts and invested in crypto thinking it was safe only to fall back into previous bad habits.
Often coin prices are very volatile and change rapidly, leading to sudden highs and lows. Investments are typically made with long-term strategies. Crypto is often seen as a get-rich-quick scheme. Stories of individuals who invested in cryptocurrency and became millionaires overnight drive others to take big risks and potentially lose their life savings. In many ways, investing in cryptocurrency is a game of chance, just like spinning a roulette wheel. However, with roulette, you know the odds of winning. With crypto the odds of striking it rich are unknown.
Crypto and Gambling Differences
There are a few ways in which investing in cryptocurrency is different from gambling. Some crypto investments can be made for the long term. These tactical investments are unlike a trip to the casino. Gambling typically doesn’t account for long-term returns. That said, casinos have regulations and governing bodies that they must be accountable to. The same is not true for cryptocurrencies, the key selling point of which is that there is no overarching governing body in control.
As part of a portfolio, cryptocurrencies can be a wise investment, especially in more established coins that have a track record of success.
Signs of a Crypto Trading Problem
If you think a loved one has an issue with cryptocurrency there are a few signs to look out for.
Obsession and Preoccupation: One sign of a potential problem or addiction to trading cryptocurrency is an intense preoccupation with trading activities. The individual may constantly think about market fluctuations, obsessively check prices and charts, and spend an excessive amount of time researching and monitoring their trades.
Neglecting Other Responsibilities: If someone is neglecting important responsibilities and obligations in their personal or professional life due to their obsession with cryptocurrency trading, it may indicate a problem. This could include neglecting work or studies, ignoring relationships, or neglecting self-care and basic daily tasks.
Financial Difficulties: A problematic relationship with cryptocurrency trading often involves financial consequences. Someone with an addiction to trading may take significant financial risks, invest more money than they can afford to lose, or accumulate substantial debts due to impulsive and reckless trading decisions.
Emotional Distress: Excessive trading and investment in cryptocurrencies can lead to emotional distress. Individuals may experience extreme highs and lows, anxiety, stress, and mood swings related to the volatile nature of the market. They may also become irritable, restless, or agitated when unable to engage in trading activities.
Neglecting Relationships and Social Isolation: Addiction to cryptocurrency trading can lead to social withdrawal and isolation. The person may prioritize trading over spending time with friends and family, avoiding social interactions, and becoming increasingly isolated as their focus becomes solely centered around the cryptocurrency market.
It's important to note that these signs should be considered in the context of a broader pattern of behavior and should be assessed by a qualified professional if there are concerns about addiction or problematic trading behaviors.
Finding Help
If you suspect that you or a loved one may be suffering from an addiction to trading cryptocurrency, it is important to seek appropriate help and support. Here are a few places to start:
Mental Health Professionals: Reach out to psychologists, therapists, or counselors specializing in addiction or behavioral disorders. They can provide an assessment, guidance, and appropriate treatment options tailored to the individual's needs.
Support Groups: Look for support groups or communities focused on cryptocurrency addiction or gambling addiction. These groups provide a safe space for individuals to share their experiences, receive support from others facing similar challenges, and access valuable resources and strategies for recovery.
Addiction Helplines: Many countries have helplines specifically dedicated to addiction issues. These helplines often provide information, support, and referrals to local treatment services and resources.
Financial Advisors: Consult financial advisors who have experience in dealing with addiction-related financial issues. They can provide guidance on managing debts, creating a budget, and developing healthier financial habits.
Remember, seeking help is a crucial step in addressing cryptocurrency trading addiction. Professionals can provide the necessary support and resources to help individuals regain control over their behavior and work towards a healthier relationship with cryptocurrency trading.
References:
Different Types of Cryptocurrencies – Forbes Advisor
Cryptocurrency: Treat investing as gambling, MPs say - BBC News
