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Rachel Wolfson
Reporter
Rachel Wolfson
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Crypto markets are infamous for their unpredictability. Bitcoin (BTC) can rise by 20% overnight, only to lose the same amount in the morning. Traders, glued to price charts and social media feeds, often find themselves in an endless cycle of hope, fear and regret.
Therefore, it should not be a surprise that recent studies have found crypto trading to have a huge impact on mental health. An in depth review by the National Library of Medicine (NLM) states, “Cryptocurrency trading apparently reflects the high-risk, high-reward nature of the game, and can cause significant psychological challenges for traders.”
The NLM report studied 11,177 participants in several countries. Based on behavioral traits, the report believes that crypto translators are more prone to anxiety and depression related to negative results. Traders may also exhibit elation associated with gains, along with addictive behaviors that may perpetuate trading despite losses.
The NLM study also 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. After the the biggest crypto market crash in history – in which $19.36 billion was liquidated from the market in just 24 hours – there have been reports of thousands of crypto traders taking their own lives.
Although there is no actual data to support these claims, one of the biggest stories after the market crash was that Konstantin Galich, otherwise known as Kostya Kudo, had taken his own lifee. The 32-year-old Ukrainian crypto investor had been found dead in the passenger seat of his Lamborghini in Kiev shortly after the market crash.
Other stories circulated on Reddit and social media platforms like X, where crypto traders said “how they lost everything” and that they “couldn’t tell their families”.
Although these results were not as tragic as Kostya, the symptoms that crypto investors face are probably similar. To put this in perspective, a 2023 global meta-analysis found that people under financial stress are 74% more likely to attempt suicide.
Raise awareness of the Crypto industry to do more
Given the high suicide rate linked to financial stress, it has become evident that the crypto industry must do more to promote discussions around mental health and well-being.
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 exciting, after a while, it wears you down. There is no rest and chronic excitement accelerates decision fatigue and anxiety,” said Kemmerer.
He added that crypto trading is very similar to gambling, especially when it comes to chasing losses. “Small victories are seen as reinforcement and it is common to want to recover after a loss. This model increases the risk for addictive behavior and mood disorders.”
Furthermore, Kemmerer believes that crypto traders often link their portfolio to their character and self-worth.
“When the markets increase, it is a victory for them, and instead of considering a financial loss, it also becomes a personal failure. There are no boundaries in this sector, and emotional ups and downs result in anxiety, burnout and depression, since failures are felt as character flaws. In some cases, depression grows to suicide” Kemerer.
This being the case, Kemmerer indicated that it has become critical for the crypto sector to focus on mental health. “Everyone in the industry should encourage conversations around the well-being of the trader. If possible, there should be a standard, such as security audits and compliance checks,” he said.
Although mental health and well-being are 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, which requires a pause and shows projections of fiscal losses/realized,” he said.
Shira Lazar, a mental health expert and founder of Creators 4 Mental Health, he told Cryptonews that awareness and boundaries are key here as well.
“As people track their portfolios, they need to track their mental well-being — how long they’re online, how responsive they are to market swings, and whether they’re still finding joy in what they’re building,” Lazar said.
Lazar added that best practices for ensuring mental health include taking breaks from screens, creating set “business hours” and grounding yourself in community or offline activities. “Mental health is not separate from innovation – it is what supports it,” he said.
In addition, crypto investors who suffer from addiction and life-threatening thoughts can also consider looking for 12-step programs, similar to those used for gambling or alcohol addiction. A recent one 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.
BC Kowalski, founder of the FrugalBC YouTube channel, also told Cryptonews that the crypto ecosystem has large communities that can provide help around this topic.
“I’m active in the Algorand communities and I’m starting to become more active in the Hedera communities,” Kowalski said. “I think that sharing personal experiences with others in the same boat can have a tremendous impact on a person’s mental health. Others may have solutions to your problems or, if nothing else, having other people going through the same thing always helps – at least it does for me.”
Seek help
If you or someone you know is struggling, help is available. In the United States, call or text 988 for the Suicide and Crisis Lifeline. In the UK, contact Samaritans at 116 123. In Canada, call or text 988 (nationwide).
