The allure of high-risk tokens and the potential for significant profits may be propelling many cryptocurrency users, particularly young men, into engaging in risky trading practices.
The resurgence of memecoins, the availability of highly leveraged trading on decentralised exchanges, and the 24/7 nature of the cryptocurrency space have all contributed to growing concerns about addiction to crypto trading.
Addiction specialists caution that traders can easily become ensnared in a cycle of speculation, experiencing both wins and losses, often lured by social media influencers who share alluring stories of their financial windfalls.
The online, decentralised, and perpetually active cryptocurrency environment has also witnessed an increase in crypto gambling platforms.
Members of Parliament on the Treasury select committee have likened digital markets to the Wild West, with the committee chair, Harriett Baldwin, labelling cryptocurrencies as "fool's gold."
Britain's Public Healthcare Chief Raises Red Flag on More Youngsters' Addiction to Crypto Trading
Amanda Pritchard, the chief executive of the United Kingdom's (UK) National Health Service (NHS), is urging British lawmakers to intervene to protect young individuals from the perils of cryptocurrency trading addiction.
Speaking at the ConfedExpo for NHS managers in Manchester on 12 June, Pritchard highlighted the NHS's establishment of its fifteenth specialised gambling addiction clinic earlier this year, in response to what she described as a "real and growing social need."
She said:
“In 1948 betting shops were still illegal. Fast forward to earlier this year. The NHS opened a 15th specialist centre for gambling addiction responding to a real and growing social need. The NHS can help, will help. But again, we can't solve this alone.”
She posed critical questions to the attendees about the role of the NHS in addressing such issues with its limited resources.
Pritchard reported that the health service has observed an increase in young individuals seeking assistance after becoming ensnared in the volatile cryptocurrency market.
She noted:
"Ever more opportunities spring up for younger people to get addicted to gambling including — as I've heard from staff when I visited the National Problem Gambling clinic earlier this year — on unregulated cryptocurrency markets."
She cautioned that without proactive measures, the NHS could become an "expensive safety net," merely treating the consequences rather than preventing ill health.
Emphasizing the importance of tackling the root causes, Pritchard questioned whether society is resigned to the NHS merely "picking up the pieces" as the tactics used to foster addiction grow more sophisticated.
She drew particular attention to the burgeoning, unregulated cryptocurrency markets as a novel pathway for young people to develop addictive behaviours.
A consultant psychiatrist specialising in addiction treatment at Priory Hospital Roehampton, Dr Niall Campbell, echoed:
"Over the past few years we have seen a steady stream of patients who have got into serious difficulties with crypto currency dealing. For some it becomes an addiction, in that it takes over their life. As with other addictions, there are huge consequences to their mental health, financial health and relationship health. It can be very similar to gambling addiction, as people constantly chase their losses. We would use a similar treatment model to other addictions, in that we recommend abstinence."
The New Addiction Frontier: Crypto Trading
The surge in cryptocurrency trading over the past 15 years has opened a new frontier for potential addiction.
The Treasury committee's report, released last year, advocated for the regulation of cryptocurrencies akin to gambling, rather than as a financial service, to prevent the establishment of a 'halo' of credibility around the $1.2 trillion market.
The report underscored a July 2022 survey commissioned by HM Revenue & Customs (HMRC), which revealed that approximately 10% of UK adults—equivalent to five million people—currently hold or have previously held cryptoassets, with 'cryptocurrencies' being the most prevalent type (79%).
The report stated:
“Cryptoasset owners tended to be younger than the general population: 76% were under 45 compared with 45% of the general population. Most owners were male (69%). The most mentioned reason for having cryptoassets was that they are a 'fun investment' (52%), while 19% said cryptoassets were a 'core part of my investment portfolio'.”
There was also anecdotal evidence suggesting that school children are engaging in cryptocurrency speculation.
The price volatility of unbacked cryptoassets—combined with their lack of intrinsic value—exposes consumers to substantial risks of financial loss.
One platform, Polymarket, has experienced its value locked in approaching nearly $29 million, as reported by DefiLlama.
This platform facilitates bets on a wide array of events, including sports and election outcomes, as well as more niche bets, such as whether Elon Musk will ban Apple devices at his companies.
It is estimated that more than 1.6 million people in England are involved in at-risk or problem gambling.
Industry Leaders in UK Push to Shape New Regulations
Critics have long drawn parallels between investing in cryptocurrencies and gambling, a view that has prompted the UK government to take steps towards regulating the crypto industry.
In June last year, King Charles sanctioned laws to subject cryptocurrencies to the same regulatory framework as other financial services, acknowledging the speculative nature of these assets as more akin to gambling than traditional financial services.
However, in July 2023, the Treasury declined a proposal from lawmakers to regulate retail trading of cryptocurrencies as gambling, choosing instead to maintain its classification as a financial service.
Andrew Griffith, the then-Financial Services Minister, was unequivocal in his rejection of treating cryptoassets as a form of gambling.
He had expressed:
“[Treating cryptos as a form of gambling] would run completely counter to globally agreed recommendations from international organizations and standard-setting bodies, including the International Organization of Securities Commissions and the G20 Financial Stability Board."
In recent developments, industry leaders are actively lobbying in the UK to shape the regulatory landscape.
Their agenda includes the expeditious introduction of comprehensive regulations, the resurrection of the stablecoin legislation proposal, the relaxation of marketing restrictions for crypto products, and the resolution of banking access challenges.
The success of these initiatives is contingent upon the political climate, especially with the potential for a Labour government to take office.
Economic Secretary Bim Afolami announced in April that further legislation is being developed to bring additional facets of the crypto industry, such as exchange operations and the custody of customer assets, under regulatory scrutiny for the first time.
CryptoUK board advisor Ian Taylor cautioned:
“We're fearful that if the government delays too long in getting a full regulatory package in place, we're going to be way behind our competitors.”
Anna Hemmings, chief executive officer of gambling support organisation GamCare, said:
“The gambling sector is large and growing in this country . . . so I think in the short term it would be very challenging for the Gambling Commission to take on crypto."
Castle Craig Hospital specialises in the treatment of cryptocurrency addiction, catering to individuals who are ensnared in trading, spread betting, and the exchange of digital currencies such as Bitcoin, Ethereum, Ripple, and Litecoin.
The hospital approaches these behaviours as manifestations of gambling addiction.
For the staff at the private Castle Craig rehab facility, located just outside Edinburgh, the shift in focus is both timely and critical.
The patients, all male, recount distressing tales of grappling with a modern form of addiction: an obsession with cryptocurrency trading.
Some reveal that their crypto addiction is intertwined with substance abuse, while others acknowledge that they initially viewed trading digital tokens as akin to gambling.
According to Anthony Marini, Castle Craig's senior specialist therapist, crypto addicts describe their experiences in a manner similar to how any gambler would describe their addiction.
He affirmed:
"So, for me, should it be regulated as gambling? Absolutely."
Since opening its doors to crypto traders in 2018, Castle Craig has welcomed over 300 patients seeking help for various forms of cryptocurrency addiction, establishing itself as the world's first dedicated centre for this emerging issue.
A patient expressed:
“Put gambling and crypto side by side, look at the repercussions of both of them, look at the severity of both of them, and tell me they're not the same."
Cheng Yuan
JinseFinance
Alex
Huang Bo
Hui Xin
Bitcoinist