A recent study from the Center for Gambling Studies (CGS) revealed a strong link between crypto trading and gambling problems.
The study was published by Elsevier in January and was authored by Devin Mills, a postdoctoral research associate at the CGS, and Lia Nower, director of the CGS.
Cryptocurrency is an anonymous digital currency, with Bitcoin being the most widely known example, Mills said. The study was conducted to determine if gamblers would find trading cryptocurrency appealing, as some find high-risk stocks.
“Nower and I felt it was an important area to explore due to the parallels between trading cryptocurrencies and high risk stocks,” Mills said.
Though Nower said the team does not know why particular gamblers or types of gamblers use cryptocurrency, one benefit of it is its untraceability, making it easier to hide gambling expenditures.
Gambling with cryptocurrency can hide gambling-related activities transactions that would normally have appeared on documents such as credit card statements. Cryptocurrency for gamblers is especially concerning for those who are not managing or acknowledging their addiction, Nower said. Gamblers who are more impulsive and sensation-seeking tend to have other problems such as abusing substances and engaging in risky intercourse.
“If crypto trading is an additional risk-taking behavior for some gamblers, then it is important that counselors, school officials, family members and others educate themselves about cryptocurrency and learn to identify crypto trading along with gambling problems in clients and loved ones,” Nower said.
Individuals prone to risk-taking likely gamble for the "high" generated by the action regardless if they are winning or not, she said. Such individuals are theoretically more likely to trade high-risk stocks as well as cryptocurrency.
Trading with cryptocurrency is inherently risky, especially with the uncertainty surrounding the cryptocurrency markets, Mills said. The study found that there was a strong link between crypto trading and gambling addiction with symptoms of depression and anxiety.
The data in the study suggested that individuals reporting elevated depressive or anxiety symptoms are trading cryptocurrency more frequently, Mills said. It cannot be inferred that trading cryptocurrency caused this elevation or vice versa due to the cross-sectional study design.
“Finally, when we included other variables, the relation cryptocurrency trading had with depressive and anxiety symptoms was no longer significant, suggesting these associations are likely explained by something else,” Mills said.
The survey data was gathered online through Amazon Mechanical Turk (MTurk) from participants over the age of 18 who were U.S. residents gambling at least once a month, Mills said. MTurk is described on its website as a crowdsourcing marketplace to enable a variety of tasks to be completed.
The study only looked at the behavior of gamblers, not at the motivation behind the behavior. There are theories that suggest that individuals gamble for the adrenaline rush, and such action patterns often lead to serious problems with gambling, Nower said.
Preliminary findings suggest that crypto trading may appeal to those who gamble at least once a month as a new, largely unregulated risk-taking activity that offers a rush similar to other types of gambling activities, according to the study.
There are also conceptual similarities between high-risk stocks and trading cryptocurrency stemming from instability that discourages investors with low-risk tolerances, according to the study.
These findings together with future study results relating crypto trading to sensation-seeking or impulsivity could inform treatment protocol development. This could aid gamblers who frequently trade high-risk stocks or cryptocurrency by replacing sensation-seeking activities and helping them make less impulsive decisions, according to the study.
“Only time will tell whether a relationship exists between the medium of gambling, the currency used, the gambling activity and problem gambling,” Nower said.