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Inside the Mind of a Crypto-Trader

This is a real experience. It isn’t a horror story, nor does it have a happy-ever-after ending. It simply gives an idea of the pitfalls people find, some quite unexpected, when cryptocurrency trading becomes an obsession. How an already addicted person thinks and responds to the stress of it has lessons for us all. Sam (not his real name) told his story to a member of the Castle Craig Hospital therapy team. He has never been in residential treatment for addiction. He is now clean and sober and is still involved in cryptocurrency because, he says, he is locked in to some long-term investments that might possibly come good one day. These are his views, which Castle Craig Hospital does not necessarily endorse.

Sam is a 50-something divorcee with two teenage children. He is a high achiever, capable of earning considerable sums in systems management. He is also an expert in digital technology. Sam is in recovery from alcohol and drugs addiction and is wise to the pitfalls that lurk along the path of long-term sobriety. He agreed to be interviewed by our team about his experience with cryptocurrency investing, during which he briefly relapsed into drinking and substance abuse.

Like many people, he sees no intrinsic ‘badness’ in the concept of cryptocurrency – indeed he thinks it could be the currency of the future. He does have strong feelings about the dangers awaiting the ignorant, the innocent and those wishing to make a fast buck.

Sam has known long-term sobriety and attends AA and NA. He knows that one addiction leads to another and that you cannot compromise or cut corners because addiction is always lurking, like a lion in the long grass, waiting to pounce. He understands the need to avoid dangerous situations and to ‘stick with the winners’ and can readily quote AA wisdom such as ‘keep it simple, stupid (KISS)’and ‘be careful what you pray for – you’re liable to get it’.

Yet, despite his background, in 2020 Sam decided to cash in his savings which were then safely invested in conventional stocks and shares and put all his available funds (about £100k) into cryptocurrencies. Over the following two years as the market fluctuated, he went from millionaire to near bankrupt and started drinking and using cocaine. Today he is clean and sober again and starting to rebuild his finances. Here is his story:

Please tell us your experience when you got into cryptocurrency

I thought in 2020 I’d missed the crypto boat but I was persuaded by some friends that there were still investments to be made. I put about £20k in it to start with, and that went down to 2k very quickly. I put another £20,000 into the same investment, buying a lot very cheaply. It quickly went up again until I was in profit, and then I was in massive profit. I began to diversify into other different tokens, coins and exchanges but mainly it was all around one ecosystem and that was my problem. I stayed in one blockchain. It was going to be the blockchain of the future. Unfortunately, it became a target of malicious venture capital outfits who attacked it for their own purposes, so it eventually went into what’s known as a ‘death spiral’ and became worthless. Then the whole crypto market in one mass went down until it was near dead. For me, that meant that say, £100k was now worth £100. At its height on paper, I had in excess of £2 million but I couldn’t cash that out because of the way I’d invested – I bought on preferential terms but this meant I was locked in for several months, sometimes years and could not sell. Of the £2 million – about £1.6 was locked up like this in prepaid untradable items that I couldn’t unload when the crash came.

What do you think about your activity now – did you see it at the time as a good investment or did you think you were running a business, or just gambling?

It felt like a business I had invested in. I had a partnership with a Thai lad and two guys in Abu Dhabi so there was always one of us on the clock, always one of us watching and looking out for pitfalls and things like that, searching for opportunities. So, I got caught up in it all. When you put in a hundred grand and you get to two million, you think it will never stop. I wasn’t planning to stop, I was planning – this was going to be how my son was going to fund his way through Uni because my friend in Thailand had a son the same age and he was doing all of the charting, watching daily prices and stuff. I thought, well we can get mine doing that too. He won’t have to find work at Uni – he can do that, keep on top of it. It was hard work for me personally, because I was working a contract with a client (my day job) and I was doing this trading too, so I was staring at screens 20 hours a day and it was getting tough. That was when I started to think it was addictive, but I had plans to have a sort of business from it too – for me to then retire, to pass the reins to my son. I was taking it all very seriously. Most of the platforms have a mobile app so I was checking prices all the time. If things went down a penny I’d sell in a panic if things went up 10 pence I’d buy more. I was engaged and I was constantly on the phone or on the laptop. I was getting very little sleep because I would be up all night. A lot of the currency launches were done in the middle of the night, to make people prove they really wanted the investment. They made it so that not everybody could buy it, so you had to be up and ready at 3:00 am to click a button to be one of the first. So, I’d be up most of the night and if I was working on a contract from home as well, I’d have one screen with my work on it and one with my crypto work.

So, do you consider that a healthy occupation now?

No – trying to do two full time jobs whilst having relapsed and still being very, very vulnerable – I was having quite a few emotional issues going on and it wasn’t healthy at all. I can’t say it caused relapse, but it certainly contributed to my lack of mental stability. Somebody who’s not sleeping and who’s stressing and his mind’s flying in all different directions – that’s not taking care of yourself.

Do you think of it now as a type of addiction?

I certainly at first was addicted, because I didn’t know what I was doing, and I was out of control. That’s a definition of addiction. Do I see it as addiction now? Probably, yes. I think it gets you focused on money which is never good. It’s never good for somebody in recovery to have an obsessive focus on something which is basically greed. To be just looking in that one direction is never good. You need to learn to enjoy life regardless of money, not because of money. But I didn’t see it as ’I’m going to be stinking rich and travel the world in yachts”, I just saw it as – ‘well I can stop work, I can build my house, I can do the charity work that I do without it being financially a drag as it is at the moment’. I’ve always had financial worries all my life.

Do you think it’s unwise for somebody with a history of addictive behaviour to get into cryptocurrency?

I would strongly advise against it. it has a big element of gambling; it has an element of chasing a high. There are definitely endorphins and adrenalin rushes which you don’t get from watching Coronation Street. Yes, you can tell yourself that you’re not drinking – but you’re losing control in another manner. It doesn’t matter how much research you do, there’s still an element of gambling. There’s a lot of nefarious elements too. If you’re sensitive to the wrongdoings of others then you should stay out of it, because there’s so many criminals and horrible people involved in it.

When you were making big games or big losses how were you actually feeling?

When I started, I thought ‘if I can make £100k profit, that’s enough’. When I made £100k profit I thought I could make half a million and then stop. Then one million wasn’t enough – why not two million or three million? It was never enough. Hitting those targets was an awesome feeling but I was also anxious because I knew how easily it would all crumble again. it was like dancing in a house of cards because inside I was thinking ‘oh God, when is this all going to go wrong?’ Bizarrely I was actually on a plane out to the Middle East and I was saying to myself ‘when will you start enjoying this rather than just constantly waiting for the day when it all goes wrong? Why don’t you just start enjoying it, enjoy the ******* money that you’ve got’. And then, two days later it was all gone.

People gamble for a number of reasons, whether they realise it or not, and one is excitement – the high – and I think you relate to that one. But what about escape from reality?

Most definitely – you’re not in the real world – so I was working with my friend’s 18-year-old son and we were talking and making decisions on what to do with 50 grand – should we just put 50 into this or should we just put 50 grand into that – not normal day-to-day decisions and certainly not normal for an 18 year old. I was in this sort of semi-dreamlike state of waiting for it all – waiting for this future that I saw for myself to become reality. I was neglecting my own health because I wasn’t sleeping enough, and I was mentally exhausted – there is a definite element of escape.

You talked about having a lot of emotional pain from other issues – do you think that all this cryptocurrency stuff helped you escape from that, or to deal with it?

It didn’t help me deal with it. Escapism never deals with it, but it helped me forget about it – it took my mind off it for a while. I’m not very good at meditation but I can lose myself in screens and numbers and chat rooms and all the rest of it, so for sure it helped. It took me away from it just like alcohol does, just like drugs do temporarily, it’s a distraction. You don’t get the same oblivion that you get from a bottle, but you certainly get distraction.

What about escape from boredom – does that figure?

Definitely – it started during lockdown, so I was incredibly bored, and I was all the things that they say an alcoholic shouldn’t be – I was hungry because I don’t eat very well when I’m on my own, I was angry because I’d flown back from Kuwait to see my kids and my ex-wife wouldn’t let me see them – so hungry, angry, lonely and very tired – all of the things that you shouldn’t be.

You seem to be saying you genuinely thought ‘I can make money out of this’?

Yes – it wasn’t like I put £100k on a horse at the Grand National and saying it’s going to win. I was building up a portfolio that was gradually going up. But actually, Crypto is very like horse racing. There are the VC’c (Venture capitalists) who are like a few owners and trainers and bookies who can get together and create the kind of market outcome they want. There are the people who study form, get info and inside tips and are the ‘educated’ gamblers. There are the majority of punters that follow trends, bet on favourites and place crazy accumulator style bets that will make them rich (if they ever come off). Of course, the owners/trainers/ bookies (the VCs and Market Makers) will watch the rookie bets and the suckers and try to alter the outcome so it’s always in their favour.

Did you ever think ‘I need to stop this right now‘?

I did think ‘you need to start taking profit’ and I did. I moved a chunk out of the volatile area into what’s known as a ‘stable coin’, but I didn’t take it into my bank because the stable coins pay 20% interest, and the banks are paying me none. So, I left it outside of crypto coins in a ‘stable coin’ but not in the bank. I took some out to buy a house, but then that stable coin was the one that was attacked so it wasn’t very stable in the end as it turned out. So, all of that money became mud and that won’t come back. Ever.

Do you think some people should not get involved in crypto trading?

Yes – nobody who has financial trouble already should try and rescue it. It is very much like any sort of gambling – only gamble what you can afford to lose. if you’ve got spare cash that you can afford to lose – then perhaps. I wouldn’t do it blindly. Twitter is full of criminals, crypto’s full of criminals that will take your money and run. it happens every day. you’ve got to research what you’re doing, and you’ve got to be prepared for it to go bad. It’s unregulated which is a good and a bad thing – it means there’s not lots of people taking their fair chunk out of it, but it also means that there’s no come-back should somebody just walk off with everything, which happens daily.

At some point you relapsed into drinking and cocaine. Can you describe how it relates to trading in cryptocurrency, if you think it does?

It kind of does because the first crypto I got involved with was with a load of dodgy people which is a very, very stupid thing to do, especially when they then turn on you and threaten your life, which happened to me. That was not nice at all because they convinced themselves I’d done something that I hadn’t. I didn’t know enough about it all to prove I hadn’t, so for a few months they were going to kill me, and I started taking cocaine – but I was telling myself ‘I’m not drinking, so it’s fine’. This event happened during lockdown while I was up all night fuelled on uncut cocaine doing the cryptocurrency. I was able to stay up for days. Obviously, your mind warps eventually and I got so high I thought ‘the only way I can stop my heart from exploding is to drink’. Which is what did. So, it was linked to cryptocurrency and also to the bad people threatening me.

Is that not a progression of problems from cryptocurrencies to cocaine to alcohol that’s well known?

The start of it was lockdown itself and then I had some quite unconnected emotional stress – that’s what started the cocaine. Then the cocaine and the bad crypto people’s death threats led me to more cocaine. Actually, all in one month – which led me to drink. I had to walk away from a £50k investment because of the threats – but I’d still got the bug. So, I suppose it is all addictive. I couldn’t just say ‘enough is enough’. That 50k and the death threat – most people would walk away at that point, wouldn’t they? But I didn’t, so perhaps it is very addictive.

So, do you regret now getting involved? Should you have left your money in the stock market with the Footsie 100?

Having a look at how the Footsie’s doing, probably not. I think my pension’s fallen on its arse. I think the funds that I was invested in went bust anyway, so the regulated financial markets didn’t work either. I invested in funds with well-established fund managers and two of them closed and I’ve lost my money.

But, in terms of your mental health, was it a bad thing?

In terms of my mental health – that’s a difficult one isn’t it, because I don’t have that bad feeling towards it that I wish I’d never got involved. Obviously, I should have taken my money out when I could and there’s a lot of people lost a lot more than me. People have killed themselves – people who lost houses, lost their kids, family etcetera. I’ve still got some skin in the game so perhaps that’s why I’m reluctant to say I regret it.

But, if you look at it from the outside, you’d lost a lot of money and lost the sobriety that you had, and some people might say that now you needed to put your sobriety first and avoid doing anything that might lead you into danger.

I think my sobriety would have gone anyway. I’ve got to be honest. I think the personal stuff that happened – I wasn’t strong enough to deal with it. I didn’t seek help. I thought I could deal with it and I couldn’t and that wasn’t crypto related at all. And that left me spinning – that left me absolutely without any sort of control or rudder or help. OK, I could have found you all and told you all and cried and all the rest of it, but I didn’t because I’ve spent so many years doing it myself. So, I don’t think that the cryptocurrency was the conduit to kick off my relapse. It certainly kept me in relapse. It kept me bouncing because, when you start to do something which is non-mainstream you try to keep it in that stream and don’t necessarily want to go outside of that stream. That causes you to have secrets and you know that, even though they’re not secrets related to alcohol, they’re still secrets. Which is all alcoholic behaviour so in that regard you’re actively displaying some of the traits that you used whilst drinking. You’re falling into old patterns and habits. That maybe opens up the neural pathways to ‘I’m feeling bad, so I’ll have a drink’, and because I can keep these two worlds separate that other world doesn’t need to know about it. So, I suppose it aids relapse because you’re already creating different groups of people and lies by omission. That’s at the core of all of your addictions – lying by omission or keeping certain groups away from other groups and not telling everybody everything about what you are doing. That puts you on edge – that puts you on a level of high alert and you have lots of – it’s called brain incoherence – when you’re not able to focus on one thing because you got too many things firing off and that leads to anxiety. And the cure for anxiety is to get pissed and then you don’t give a damn.

If a recovering alcoholic asked you: is it a good idea to for me to try and make some money on the crypto market? What would you say?

I would probably say no. I certainly wouldn’t facilitate any one in doing that. It’s a risky business -some people make money – most people lose everything. Like gambling, like trying to stay sober, the odds are stacked against you.

But, in spite of that – you yourself – do you intend to continue?

Only because I still have money tied up in it. I’ve still got a few thousands of pounds worth of stuff that’s not vested yet (not tradable). If I leave those a year, who knows what they might be worth. Might be still nothing further or might be worth a lot more than nothing. I’m not going to spend the time on it that I used to. I can’t cash out because I’m locked into these investments that are ‘unvesting’ over a period of time. I cashed out some the other day – it was nice – I got 10 grand out, so I’ll pay back my debts over time and who knows. But certainly, I’m not going to stay in it. I never intended to be in it for long term. I thought once I got to £2 million that’s enough to live on to retire on. I’m still invested financially but not anywhere near as invested mentally. I wouldn’t get out of bed until I checked prices and chatted to a few people and all that kind of stuff, but I haven’t even looked at my phone today.

So, yes or no, is it gambling?

Yes

Final Thought

Don’t do it. I think the concept is good but the reality at the moment is that it’s too immature and too risky for most people. You’ve got to be really in it and you’ve got to really like risk. And, if you’ve got that addictive gene, then you’re going to end up in trouble.

I seem to go from train crash to train crash through life but with a smile on my face- not so true when I was stuck in the middle of addiction obviously, but yes, my life has been quite hard.

I’m not doing anywhere near as much as I was, but I still have some investments that have yet to mature. It’ll be at least a year or so before they’re worth any money. But if I can hang on and not get obsessed with it then that should be OK. I don’t regret it. I regret some of the choices I made. I regret the relapses but now I’m quite good at trading and I am quite well respected in that community for knowing what I’m talking about and for always being fair and kind and considerate to people who are struggling. I’m always the first to say ‘right, let’s help them out’. There is a community to it, a little bit like an AA fellowship. You’ve got communities where you’re chatting and quite often somebody’s having a hard time and I’ll be the one who starts a collection for them or says ‘let’s get him a present to cheer and up’ or something like that, you know. I’m the old man of crypto – it’s a young man’s game. They’re all 16 – 18.

I’ve still got a few investments that haven’t even launched on the market yet because they’re not launching in the current climate – I don’t think I’d ever get to 2 million again but I might be able to salvage some of it.

Acknowledgment

We are grateful to Sam for his honesty in talking to us. The views about cryptocurrency trading expressed here are his own and CATCH Recovery does not endorse them, although we are grateful for the insights they give into the mind of a cryptocurrency trader.

If you think that you might have a cryptocurrency addiction or if you are worried about the dangers of cross-addiction, please give us a call. We are always ready to talk and offer advice.

Castle Craig Hospital was the first in the UK to offer treatment for cryptocurrency-related disorders, and CATCH offers this on an outpatient basis. To read more about the dangers of cryptocurrency trading and the treatment we offer, go to https://castlecraig.co.uk/behavioural-rehab/cryptocurrency-addiction