Since cryptocurrency’s creation in 2009 by an unknown group, virtual currency has become a topic of discussion. Bitcoin was the first currency but other currencies have also undergone rapid growth. As these digital currencies don’t need a third party, like a bank, they enable users to make transactions without knowing their identities. Although this sort of transaction can reduce fraud, the lack of regulations has incredibly increased in the market. In fact, during the lockdowns, the total value of all cryptocurrencies has grown between £175bn to more than £1.75tn.
Based on the figures from the Financial Conduct Authority (FCA), hundreds of thousands of British people hold digital currencies. And since the beginning of May, the highest level was reached with up to £1tn just a few weeks ago. The cryptocurrency addiction has also grown because some people want to trade more when they lose. To avoid an obsession, here are the tips for responsible investment in these currencies.
What is Cryptocurrency Addiction?
Cryptocurrency addiction is the uncontrollable trading in cryptocurrency and associated activities that can result in negative effects on the traders’ life. Similar to drug or gambling addiction, it can damage a person's life and family relationships. In fact, the addiction to cryptocurrency trading shows the same behaviour as gambling addiction according to the experts. Tony Marini, the lead counsellor at the cryptocurrency addiction clinic at Castle Craig Hospital in Peebles stated that this addiction has shown a significant increase chiefly in Scotland. It was similar to the crack cocaine of gambling as it was so fast and the addicts spend 24/7 on their phones or laptop in their bedroom.
Marini also explained that in the past few years, the clinic had treated more than 100 patients for cryptocurrency addiction and they sought help because they felt the combination of constant availability and extreme volatility. Moreover, another factor pushing people to invest in cryptocurrency is that several traders who make money in this sector only tell that they are making money but they don't mention when they lose their money. People are, therefore, seduced and start to invest in this expected interesting business.
Factors Contributing to a Full-Blown Addiction
Here's a story of a former addict that lost millions of pounds trading cryptocurrencies. As he doesn't want his identity revealed, we call him Jake, a compulsive gambler at various non GamStop casino sites in the UK and crypto trading platforms. In 2015, Jake bought Bitcoin and he remembered the exact moment when he became obsessed. As a matter of fact, he entered a trade and desired to risk that last amount he had. Hoping to earn a lot of money; he, unfortunately, lost millions of pounds in about 20 minutes one night.
His addiction was also associated with difficulties in his personal life and marriage. He ended up making back little by little everything he had lost in a single trade, making him feel very delighted and excited. Jake even used trading money that was not his in the hope of winning like his first success. With the help of his family, he was able to pay back £1.5m to his employer and is now still in treatment for his addiction.
Moreover, technology is also another factor for a cryptocurrency addiction, not just the market that can cause problems. Technology in cryptocurrencies is, actually, known complicated so it is important the users be careful to avoid investing in a scam. It is the case of Jen McAdam and her family who lost over 250,000 Euros when investing in these activities.
How to Responsibly Invest in Cryptocurrencies?
Those who are facing negative consequences on making money with cryptocurrencies should consider investing responsibly or stopping completely. To curb the amount of money, the traders should start on how much money they want to spend on this activity in a session or in a week.
As an example, for those who choose to use a crypto trading account, limit it to a small amount to help to reduce their spending. They must pay all their priority on the date of the payment such as food, rent, and more. In other words, they should never spend their economies and investments on cryptocurrencies. Additionally, another tip to invest in a responsible way is to reduce the time and days that they will trade in cryptocurrencies. Instead of trading twice or three times a week, try to limit it to once a week and on a specific day or time.
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