Mental health and cryptography: How do fluctuations affect well-being?

Mental health and cryptography: How do fluctuations affect well-being? – Mail Bonus

The world of cryptocurrencies is well known for its fluctuations. Especially in the early days, digital assets experienced wild price fluctuations, rising or losing double digits in one day. It seems that the current bear market is no exception to this trend.

While wild price fluctuations provide an opportunity to make a profit – if you are lucky – the volatile behavior of digital assets can threaten the mental and emotional health of investors.

Mental health is a hugely important part of human life, which until recently was not given much weight in the mainstream media and debate. Finances and investments can play an important role in emotional well-being, while constant despair over the volatility of the cryptocurrency markets can hurt.

This became clear after the Terra problem, when the decoupling of the stablecoin ecosystem sent the entire cryptocurrency market into a spiral and eroded confidence in the cryptocurrency ecosystem.

In fact, after the collapse in prices, suicidal ideation appeared in many countries in LUNA subreddit, where the savings and investments of many investors were wiped out in a matter of hours.

Fear and mistakes

Even when they have the investment knowledge, beginners can make bad decisions under emotional pressure. In addition to technical and basic analysis, the right mental attitude plays an important role in business. Under the pressure of emotions, rashes can occur, which usually cause mistakes and serious losses. These mistakes can be divided into several groups:

  • Gambler Syndrome: New investors start opening large numbers of trades without thinking about it.
  • Premature withdrawal from a contract: On the first successful trade, beginners tend to make a profit quickly and close the position too early. In this case, they lose part of the profits they could make.
  • Independence from other market participants: Many traders are guided by the signs and opinions of established market participants. To achieve maximum benefits, however, it is necessary to become independent of these factors.
  • Accepting Losses: The cryptocurrency market is very sensitive to emotional developments. Prices respond immediately to a variety of statements and rumors, so it will not be possible to completely get rid of the effects of emotions.
  • Ease of the first contract: The first profit gives the trader a positive feeling, which can only push them to become undisciplined.

Many cryptocurrency enthusiasts refer to FOMO, or fear of missing out on a potential contract. Another big fear in the world of cryptocurrencies is related to hackers. The digital, distributed, and often anonymous nature of cryptocurrency makes these assets more vulnerable to hacking and fraud.

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These are just a few of the many factors that can affect the mental health of investors in cryptocurrencies. To limit the psychological impact of financial stress, it is important for investors to decide how much they can afford to take.

New disease

Over the past two years, cryptocurrencies have risen and fallen frequently, which could not help but affect the mental health of cryptocurrencies.

According to experts, cryptocurrency trading can turn into a real addiction. The first signs of this psychological disorder occur when traders constantly monitor price fluctuations in digital currency. Experts refer to this process as “day trading” and consider it to be another type of gambling and people who are addicted to trading cryptocurrencies are referred to as “crypto addicts”.

Source: Paget Michael Creelman

The main symptoms of cryptocurrency addiction are muscle tension, anxiety, monitoring of digital asset prices around the clock and constant thoughts about trading in digital currency, even while doing other things that are not related to the cryptocurrency industry. All this leads to depression and insomnia.

In some countries, specialized programs are already in place to help address the mental health problems associated with digital asset trading.

Who is at risk?

Fortunately, not all cryptocurrencies are subject to mental health problems.

Researchers from the University of Technology in Queensland, Australia, recently conducted a study in April on who is most susceptible to cryptocurrency and which individuals should pay special attention to their mental health during business.

People who are vulnerable to cryptocurrencies are people who love gambling and do not really trust the authorities. A strong desire to have nothing to do with the state causes such people to turn to cryptocurrency.

People who want to deceive and manipulate others for their own interests, such as skeptical and sensible people, are also vulnerable to cryptocurrency addiction.

Narcissists are also vulnerable to cryptocurrency. Such individuals are usually incredibly safe and therefore risk risky investments. At the same time, they choose to focus on the positive aspects of life, believing in their bright future and believing that nothing bad can happen to them. This unwavering self-confidence is what drives narcissists to take risks and buy cryptocurrencies.

People with severe mental illness are characterized by heartlessness, low emotional intelligence and lack of empathy. Such people usually have less emotional reactions, which makes them immune to stress and anxiety, so they probably like risk. In addition, psychiatrists are impulsive. This trait, combined with a tendency towards risky behavior, makes them vulnerable to risky business behaviors. They are afraid of missing out on the benefits that others might receive.

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Sadists also want to invest in Bitcoin (BTC) because they do not want to miss out on potential rewards like psychiatrists. For them, the pleasure of someone else’s pain is linked to a feeling of superiority over others. At the same time, psychiatrists and sadists, unlike narcissists, have no illusions about their prospects, which is reflected in their passion for cryptocurrency.

Of course, not all cryptocurrencies are psychiatric. However, most people do not develop an addiction to digital asset trading. It is important to remember that when starting to trade cryptocurrencies, one must take into account all the facts that can affect health and well-being. To limit the psychological effects of cryptocurrency stress, it is important for investors to decide how much they can afford to take.

According to Sergey Miheev, Product Manager of the United Traders Investment Forum, investors should not only focus on the cryptocurrencies themselves:

“First, stop looking at encryption solely as a business tool, unless you are a professional day trader with years of experience. If you are an investor, it is better to understand how prices are created and why they change, the value of a particular currency and market behavior patterns. Then you get a bigger picture. One way or another, you realize that cryptography is a development industry, which means that the best policy is simply to buy and hold. Remember, time is with you. “