The cryptocurrencies They can be an interesting option to invest and even to achieve meteoric returns … or significant losses. The risk? In addition to the monetary, also it can become an addiction.
Along with those who bet / invest in the short, medium or long term, there is another category of people who handle cryptocurrencies all day and almost at all times: the day traders or “daily changers.”
Read also: Bitcoin: the Government decreed that cryptocurrencies pay the check tax
Daily buying and selling of crypto
Day-trading is the buying and selling of stocks and other financial instruments within the same day. The traders They take advantage of small price movements and constantly monitor changes through the Internet to obtain small profits that accumulate.
Some years ago, the day trading It was only carried out by financial companies and investment experts. But now, these types of transactions are open to anyone with an Internet connection and a mobile device.
Nicolás is 37 years old and takes the world of crypto as a job, as “something serious”, that he likes and it can give you a good income. In dollars. “I really liked trading, buying and selling stocks, but you always needed an intermediary. With cryptos that is lost: you are your own broker, you buy and sell when you want ”, he told TN Tecno.
Another type of addictive Cryptotrading is known as Spread Betting. This is when someone does a bet on a stock, coin or other financial instrument, rising or falling. The difference between day trading is that it does not involve buying a stock (or a security), but something more like “betting” in which direction the price will go. Yes, a “timba”, but instead of with a roulette wheel or the horses, with the trends of the actions.
“It is a way of trading without buying or selling. It is a kind of bet to go up or down. This comes from the hand of leverage, which is something that exchanges allow, a kind of loan. Binance, for example, can give you up to x125. This means that if you put $ 100, they can give you $ 12,500, ”explained Nicolás, who warns that it is a much riskier system.
“In this you have to inform yourself much more. It is something very risky almost on purpose designed for everyone to lose. But if you do it for a short time you can generate a good profit ”, he summarized.
According to a report from BTR Consulting, one in ten traders in the United States is addicted. “Sometimes they are lucky and win. Most of the time, they lose and lose a lot, but they continue because they are in a downward vicious cycle, doing what is called ‘revenge trading’ to try to recoup their losses. This is a recipe for a total disaster, “explained Sebastián Di Lullo, from the cybersecurity consultancy.
Can someone who takes it as a job be different from someone who becomes addicted?
“The person who does it as a job does not dedicate high hours, makes an investment and is not constantly pending and above all things, he bets an amount that he can afford to ‘lose’ as an investment, he does not invest more than that. The addiction becomes more a bet for the promise of great profits than an investment modality, ”explained Di Lullo, from BRT Consulting.
In Nicolás’s case, he usually spends 6 to 8 hours a day working with cryptos. But try not to leave your investments to chance or hunch. Information, he explains, is essential.
“You wake up, you read the news, from Twitter or specialized media, market analysis of Bitcoin and other cryptocurrencies that you like. Of different stock market indicators. There are a lot of indices one looks at before starting to trade.. Once you saw that you start trading. And it is always recommended that at the beginning they are few. But always looking at bitcoin, which is what moves the market, ”he explained.
How addiction to cryptocurrencies is generated
- Investing instead of gambling. Many people justify betting on the cryptocurrency markets as “investing.” It is not seen as a one-time bet on a horse, or an evening playing online poker. The cryptocurrency markets are incredibly volatile, with thousands of different cryptocurrencies available to choose from, it’s easy to get sucked into a cycle of speculation, profit, and loss.
- Access through Smartphones. The Internet allows anyone with a smartphone to instantly access global markets, where prices are updated every few seconds. Watching price fluctuations can be attractive and, in some cases, addictive.
- Fluctuating markets. The high risk fluctuating cryptocurrency market attracts the troubled gamer. Provides excitement and an escape from reality. Bitcoin, for example, has been traded a lot and huge profits and losses were made.
- Social networks: Many people on Tiktok and Youtube posing as experts who can educate consumers about emerging crypto markets. Even though Tiktok has placed restrictions on posting financial advice on the platform, there is still a wealth of material that provides investment ‘advice’ on trading cryptocurrencies. Many of these video profiles have a large following. Many people use WhatsApp groups as a way to exchange tips on trading cryptocurrencies.
- Promise of big profits. The internet is awash with stories documenting the huge financial gains that some lucky people have made from trading cryptocurrencies. However, losses are rarely reported.
Characteristics of a cryptocurrency trading addict
“Like any addiction, it has obvious symptomss, as, just to mention a few, it produces a change in character, it becomes very difficult to stop operating, you bet money that you cannot afford to lose, you continue playing to recover what you lost, you seek to get more money in various ways to continue betting, day-trading is prioritized over other important things in life, and above all, the denial that this situation is happening ”, Di Lullo explained.
- Devote all your time and money to trading online
- Experiencing financial problems
- Chase their losses (they spend more to recoup their losses)
- Believe that a great victory is about to happen
- Lie to friends and family about the extent of your losses
- Experience mood swings, depression, and hopelessness
- Constantly think about the next investment
- You become restless or irritable when you try to slow down or stop
- Deny the problem
Cryptocurrency trading addicts display the same kinds of behavioral addictions as problem gamblers. There are no figures on the number of people addicted to trading cryptocurrencies. But this grows fast, 24 hours a day, 7 days a week, on your phone, your laptop, in your bedroom. Many people are trading cryptocurrencies and they tell everyone that they are making a lot of money. We don’t listen to people who are losing money.
“It is true that what you can win or lose in one day is unlimited. You can earn millions of dollars in a few hours or lose everything in seconds, “says Nicolás. That is why he recommends managing risk well, and “knowing how much you can lose.”
“It is a good source of income but it is like everything, you have to know. It is not so simple. You can be “lucky”, just like in the casino. But here, if you don’t study, from one moment to the next you can lose everything, “concluded the crypto investor.