Mental Health and Crypto

Part One of a Two-Part Series: A Guide for Emotional Well-being in the Volatile Crypto Market

Introduction:

In today's post, I'm delving into a significant but often overlooked subject: mental health in relation to losses in the crypto market. Despite the existence of Bitcoin and cryptocurrencies for over a decade, there has been a surprising lack of discussion and coverage on this topic. While researching this area, I came across some insightful articles by Elena Perez from Coin Telegraph and Leigh Cuen from Bitcoin Magazine. Although I couldn't secure Leigh as a guest for a podcast episode, I believe it's crucial to address this issue sooner rather than later. We at Crypto Unplugged believe in open and honest conversations, and today, I'm peeling back the layers to discuss the mental health implications of investing in crypto during volatile times.

The Reality of Crypto Investments and Mental Health:

Before we delve into the specifics, it's important to clarify that I am not here to criticise investing in cryptocurrencies. As an avid crypto investor, I understand the potential and believe in the financial opportunities they offer. Despite the recent market downturns where billions of dollars were wiped off the market cap, I remain bullish on crypto. It's worth noting that crypto investments are my primary vocation, and I have personally committed to this space for a few years. However, when I discuss mental health and the crypto crash, I'm focusing on the reality of the situation—the extreme volatility, the euphoria, the subsequent downturn, and the resulting emotional roller coaster.

The Psychological Impact of Crypto Losses:

Trading during a bullish cycle can be exhilarating, but it often leads to a relentless obsession with monitoring the markets through various devices and social media platforms. This constant engagement can develop into an addiction, causing anxiety, depression, and even insomnia. In a previous podcast episode (link to podcast at the end of this paragraph), we explored the psychology of a crypto investor, touching upon addiction and related aspects. However, in this series of posts, I want to connect with you, our readers, on a personal level and provide some insights for emotional well-being in the volatile crypto market.

Navigating Crypto Losses: Strategies for Emotional Resilience:

Since December 2022, many of us have experienced substantial losses in our crypto portfolios. Depending on the amount invested, these losses may range from four figures to eight figures. It feels like we are rapidly transitioning from riches to rags, echoing Tony Bennett's song "Rags to Riches" in reverse. Strangely, when we turn to social media, particularly Crypto Twitter, we encounter a significant number of individuals seemingly in denial. Perhaps this cognitive dissonance serves as a coping mechanism. I recall the December 2022 crash vividly; the disbelief that the market could plummet to the extent it did, leading to a bottom that materialised weeks later. Looking back, I realize I may have been overconfident, lacking a well-defined strategy to navigate prolonged market downturns. It's crucial to acknowledge our own complacency during those times.

The Emotional Impact of Crypto Losses: Coping Strategies for Investors:

Bitcoin, known as the least volatile cryptocurrency, dropped from $69,000 to $17,000 during this period. When we examine our individual investments, the figures are staggering. Coins that were once worth tens or even hundreds of thousands of dollars are now significantly diminished. We often quantify these losses in percentages, but it's equally important to consider the emotional and psychological toll they take on us when we detach from social media.

The Dark Side of Crypto Losses: Addressing Emotional Struggles:

In times of crashes, many of us turn to Crypto Twitter, where we discuss concepts like "diamond hands," "getting REKT," and the potential for market recovery. However, what remains unaddressed in this forum are the dark spaces that individuals find themselves in when significant financial losses occur. Crypto Twitter is characterised by a projection of bravado, a manifestation of the "fake it till you make it" mindset. Unfortunately, this approach often dismisses the genuine struggles faced by many investors who have experienced financial setbacks. By maintaining an alpha mentality, we neglect the importance of discussing mental health and the emotional implications of crypto losses.

Seeking Authentic Connections and Emotional Support:

Recognising that social media platforms, including Crypto Twitter, only provide a superficial glimpse into our lives, we must actively seek authentic connections and support networks. Financial losses can have a profound impact on our overall well-being, as they directly affect our sense of security and freedom. It's essential to remember that behind the avatars and usernames, we are complex beings with multifaceted emotions. By fostering genuine connections outside the realm of social media, we can find solace, understanding, and the emotional support necessary to navigate the ups and downs of the crypto market.

Conclusion:

In conclusion, this post aims to shed light on the often neglected conversation surrounding mental health and crypto losses. The recent market downturns have left many investors grappling with significant financial setbacks, but it's important to acknowledge the emotional toll and potential dark spaces we can find ourselves in during these times. While Crypto Twitter may project bravado, it's crucial to seek authentic connections and support networks outside the realm of social media. Handling losses requires personal responsibility and the cultivation of emotional resilience. By addressing mental health, we can create a healthier and more sustainable crypto journey for ourselves and others.

Stay tuned for my next post, where we'll dive deeper into strategies for emotional well-being and provide actionable steps to develop resilience during market downturns.

Remember to like, share, and subscribe to our newsletter for the latest updates on mental health and the crypto market.