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Cryptocurrency's addiction problem

Episode Summary

Riding the booms and busts of cryptocurrencies can feel like gambling. No wonder addiction to trading the digital coins is on the rise.

Episode Notes

The ups and downs of cryptocurrencies such as bitcoin can bring quick wealth — or quick bankruptcy. It's the hope for a huge payoff that keeps people hooked on these fluctuations, to the point where their attention turns to addiction. 

Today, in the wake of the crypto market's recent crash, we look at how obsessing over digital currency can affect people and their lives. 

Read the full transcript here.

Episode Transcription

Gustavo: Cryptocurrency. We've all got that one person in our lives who goes on and on about Bitcoins this or ethereum that, or I don't know, those Bored Ape NFTs, or dogecoins, dogs or whatever, but the fast moving forever fluctuating crypto market -- it's taking a toll on investors.

It just crashed recently. And some of those people who put in so much money into it, they're getting addicted.

Luis: I'm living, breathing crypto. Before I go to sleep, soon as I wake up, that's the first thing that comes to my mind, I'm around the clock.

Gustavo: I'm Gustavo Arellano. You're listening to The Times, daily news from the LA Times. It's Thursday, May 19th, 2022.

Today, how the recent crash of the crypto market shows that obsessing over the ups and downs of digital currency can affect people and their lives.

Andrea Chang is my colleague and she covers wealth for the LA Times. Andrea, welcome to The Times.

Andrea: Thanks, Gustavo.

Gustavo: Okay. So before we even began, if you could just do me the favor and give us a brief reminder of what cryptocurrency is, why so many people in governments have so many thoughts about it, because I always forget. So please haha.

Andrea: Sure. So simply put, cryptocurrency is a digital or virtual currency that can circulate without the need for a central authority like a government or a bank. So people are really into it because it's distributed across many computer networks. That means in theory, it's more secure, it's nearly impossible to counterfeit and it's immune to government interference and manipulation.

Gustavo: So anyone could create a cryptocurrency?

Andrea: Technically yes, it takes a lot of work. It's a lot of math, but anyone can buy cryptocurrency and a lot of people have, especially in the last year or so.

Gustavo: So that's why my cousin Placido has been talking about it recently. He likes to make money. So it started to become even more popular. How has the surge in popularity for cryptocurrency? How, how has it been affecting people, especially during this pandemic?

Andrea: My God, it has become a complete phenomenon. And it's been helped along by the pandemic. You have a lot of people who are now staying at home. They're on social media a lot. They're reading about the hype on Twitter.

AP CLIP: Once Bitcoin is more generally accepted though, the risks are much smaller.

Andrea: People like Elon Musk giving crypto a lot of publicity.

AP CLIP: The ratings are in for Elon Musk and his appearance on Saturday Night Live. During his monologue, Elon Musk boasted about dogecoin. Not surprisingly when Elon Musk announced that he, uh, has put a portion of his treasury, $1.5 billion, into bitcoin, the price spiked.

Andrea: And I think it combines people's natural curiosity with their desire to make a lot of money fast. 

AP CLIP: Bitcoin has been gaining traction everywhere from ATM's to the auto sector and the digital currency crossed the $50,000 mark

Andrea: And it seems like everybody knows someone who invested in crypto and suddenly made thousands of dollars. And they were like, “Hey, I want to be in on that.”

Gustavo: Or they say they made thousands of dollars.

Andrea: Exactly. So I began reporting a story a few weeks ago on people who started investing in crypto and then suddenly found themselves kind of obsessed with it to the point where they are now worried that they are addicted, like full blown addicted to crypto, cannot stop trading, cannot sleep, are having trouble eating, are saying no to social outings with their friends, are ignoring their families. So one of the women that I spoke to for this story, her name is Sabrina Byrne, she is a 26 year old from England, and she started investing in crypto for the first time. This past January, within a few weeks, she was staying up until 5:00 AM, compulsively checking her cell phone, looking at her crypto apps every 10 minutes. She told me she thinks at the height of it, she was looking more than a hundred times a day. Her friends at work started approaching her by late February saying, “Are you okay? This seems like it's become really unhealthy for you.” And it was sort of her wake up call that she had developed an incredibly unhealthy relationship to digital currency.

Gustavo: A lot of us are addicted to our phones, it seems like, or at least a lot of technology. But what is it about crypto addiction that's particularly harmful?

Andrea: You're right. I think a lot of us, myself included, you know, it's very difficult to get off of our phones. I'm checking Instagram all the time or Twitter. And there's these gamification aspects to it, right? If you get likes or comments on something you post, that makes you feel good, and then it makes you want to contribute to the cycle even more. Crypto has all of those elements. And then it's also the community aspect of it. You go on Twitter, other people are chatting about it. You feel like you're a part of it. There's the hype, there's the newness of it. You know, it's something that's not really understood that well. And because it's still in the early stages, people want to get in on that. And it feels very exhilarating, especially when the prices go up and they go up very, very quickly. There's aspects of it that kind of feel like gambling too. Right. And we all know it's very easy to get hooked to gambling. And I think ultimately it's wanting to be in on this really big trend and there's the making money aspect of it. 

Gustavo: Yeah, that's the thing. It's like, okay. You and I have, when we're checking Instagram, obsessively or Twitter, well, you log in, you log off and that’s that. With crypto, it seems, well, it doesn't seem – you're putting in your own money. So that money that you put in say you put $5,000. Well, it could all disappear or it could all go up and then if it goes up, you're going to want to put more stuff into it.

Andrea: You're absolutely right. Instagram. Yeah. A like is nice, but it's not like putting in a little bit of money and then seeing it come back like five fold, right? I mean, for most people who are old school investors, like my dad, it's like you put money into a mutual fund and it goes up like a single little percentage point. It's not like, okay, this morning, this thing was $5,000 and suddenly it's $12,000. Right. That's like, and I didn't do anything except eat breakfast

Gustavo: We'll be back after the break.


Gustavo: Andrea, I always see these headlines about how volatile cryptocurrency is, and we're talking about addiction, addiction is never good. So why do people go for it?

Andrea: I think people go for it because they A: want to make a lot of money in basically no time at all. And I think that there are people who believe very strongly that aside from the money component of it, crypto will change the world. They like the idea that cryptocurrency is not something that is regulated by the government. They feel like if they're part of it, they're part of a new world of finance.

Gustavo: Yeah, it's not just money. It's like literally changing how we live life.

Andrea: Right. 

Gustavo: Almost becomes like a religion.

Andrea: Yeah. There's people who are just really big believers in it. And some of the people I spoke with for the addiction story said that. They're like, “I just, I'm part of a movement.”

Luis: I started small. And then as those kept creeping up, creeping up, I bought doge at $7 then again at $13 and I bought it again at $32. And I did not know that it was going to $69 and that kept going up more. So I kept adding and adding and adding… 

Andrea: So another person I spoke to for this story, his name is Luis Taveras. He's from the Bronx. And he's one of these people, right. He loves the money-making aspect of it, but he also talked about how he feels like it's this total game-changer when it comes to money.

Luis: My family thinks I’m crazy. My friends, everybody, thinks I lost my mind. You know, I tell them, I see this opportunity of getting out, and they don't believe it.

Andrea: He used to work as an intake receptionist at a medical clinic. And then a few months ago, just quit his job to make crypto trading his full-time gig.

Luis: So I had to choose between crypto and work, and I chose crypto.

Andrea: He shoveled $50,000 into the cryptocurrency market. Self-taught, everything he knows about crypto he basically learned on Twitter or chatting with people on Discord. And when I spoke with him, this was before the big crypto crash of this month, he had already lost about $45,000 of that. He talked about how he used to be addicted to drugs and alcohol. So he recognizes the addictive qualities when they start appearing in his life again.

Luis: it gives me like a natural high. I don't know how to describe it. 

Andrea: And it's just another one of those instances of somebody who knows that he’s been developing a bit of a dependency on his crypto trading.

Gustavo: Oh, man. Crypto isn't really that old. 

Andrea: You're right. Crypto is still in its nascent stages, right? Bitcoin was released in 2009. And Even then a lot of people didn't really get into it until the pandemic. And that makes it really hard for addiction specialists because they don't really know too much about it themselves.

GUSTAVO: I mean, who's studying addiction when it comes to this and what are they saying about how it's different than other types of addiction?

 I spoke with a therapist in Wisconsin who knows a bit about blockchain and crypto. And he was like, I just presented recently to a bunch of other therapists and gambling experts on crypto. And at the end the general consensus that I got from people in the audience was, “you made my head hurt.” They just didn't get it. So then that makes it difficult then if you're trying to get help for an addiction to crypto, if you can't find someone who really even understands the problem.

Gustavo: Have there been any studies as to its prevalence?

Andrea: Yeah. So there was a group of mainly Australian based professors and they looked into crypto addiction. A lot of people were calling it an emerging trend. There is a Swiss rehab clinic. You can pay $90,000 a week to get treatment for your crypto addiction. And locally, there are a lot of therapists who are now beginning to understand the trend. Applying actually gambling addiction therapies to people who are suffering from crypto. The thought being that uh, you hear a lot about behavioral addictions, right? These are different from being addicted to heroin or something. Behavioral addictions covered so many different things – people who are addicted to video games, to gambling, to sex – and people think that there's just a very close similarity between someone who has a problem with crypto and someone who has a problem with gambling. 

Gustavo: When it comes to addiction, it's not just the addict who's hurting themselves. It's also them hurting other folks. So how has crypto addiction affecting, society right now? So far.

Andrea: You're absolutely right. I think a lot of the times, people who are affected it's like your family and your friends, mainly your family. I spoke with a gambling addiction expert over at UCLA, and he said that he's been getting a lot of calls lately about crypto addiction. And the calls are actually coming from family members, someone saying, “My husband or my son or someone is just so wrapped up in this, can you help?” And it's really sad because a lot of the time this happens with gambling addiction too. There's this pattern of hiding, right. Where the person is just furtively doing what they're doing on the side or in the middle of the night. And with crypto, it's very easy. You know, some of the people I talked to were like, yeah, I just, I have a phone and I could be out to dinner with someone and just kind of like checking it in the bathroom or like underneath the table. Um, so it's hard to kind of know like what they're doing until it's too late. 

A colleague at the LA Times mentioned that, you know, they have a friend and it was exactly that situation where the husband ended up just trading away a lot of money in crypto and the wife found out and it's just completely ruined their lives.

Gustavo: So, are addiction specialists getting ready to specifically target this? In other words, are, are, you know, you mentioned a clinic, but are there more resources being thrown at it, especially coming from the government?

Andrea: So I haven't heard anything on the government end. But certainly within like private therapy. A lot of research going into it. I think there's also on the other end, people were like, of course therapists are jumping in on this because there's money to be made. But yeah, I would say that, I think in the coming months, in the coming years, you will see a lot more ads and a lot more opportunities for people to seek professional help.

Gustavo: Because cryptocurrency isn't going away.

Andrea: No, definitely not.

Gustavo: And how about Luis, the guy you talked to. How is he doing post-crypto crash?

Andrea: He told me that he's hopeful.

Luis: I'm really excited at this time. I'm loading up my bags and everything, every money that comes to my hand though, you know, I got an opportunity to get more now than before, so why not?

Andrea: That even though he's lost, basically everything, that the market will turn around.

Luis: I haven't lost it yet because I haven't. So I'm still holding, we call it holding. And the only way I'll lose is if it never goes back up.

Andrea: And he'll recoup his losses.

Gustavo: Andrea. Thank you so much for this conversation.

Andrea: Thanks, Gustavo.


Gustavo:  And that's it for this episode of The Times, daily news from the L.A. Times. Be sure to tune in for a special feature – the L.A. mayoral debate –  presented by the L.A. Times and KCRW and moderated by yours truly and KCRW reporter Anna Scott. The debate focuses on a major issue in L.A.: Housing and the homeless. Check it out on this Friday May 20th at 6 p.m. Pacific, or tune in next week to catch our episode with debate highlights.

Angel Carreras and Kinsee Morlan were the jefes on this episode, and it was scored, mixed and mastered by Mike Heflin. 

Our show is produced by Shannon Lin, Denise Guerra, Kasia Brousalian, David Toledo,  Ashlea Brown and Angel Carreras. Our editorial assistants are Madalyn Amato and Carlos De Loera. Our engineers are Mario Diaz, Mark Nieto and Mike Heflin. 

Lauren Raab and Jazmin Aguilera edited this episode. 

Our executive producers are Jazmin Aguilera and Shani Hilton. And our theme music is by Andrew Eapen. Damn! When did we get so big? Right? But we could always get bigger. Like what you're listening to? Then make sure to follow The Times on whatever platform you use. Don't make us the Poochie of podcasts. I'm Gustavo Arellano. We'll be back tomorrow with all the news and desmadre. Gracias.