Stephen has lost more bitcoin than most people will ever lose.
Growing up in the remote Shetland archipelago, he left school at the age of 13 to become a fishing laborer before moving into the construction business, eventually earning £85,000 a year digging tunnels for Crossrail.
Despite his self-made success, compulsive cryptocurrency trading, alcohol and drug abuse took over his life.
Amidst the mists of multiple addictions, he lost “addresses” between five and 10 bitcoins, making his buried digital treasure – worth up to £300,000 today – impossible to recover.
Stephen discovered the potential of Bitcoin early on and had a knack for trading. But even if he had that money now, his addiction meant that it would soon be dispelled.
“Trade is gambling, there is no doubt about that,” he says.
“I studied and studied. I taught myself how to become a good trader and tried very hard to manage my accounts and adhere to a set of rules.
“But my mind will drift and I will go all in, like a poker player thinks he has the perfect hand. I was convinced I would become a bitcoin millionaire.”
Now recuperating at Castle Craig Residential Therapy Clinic in Scotland, Stephen fears that hordes of young men are being lured into high-stakes trade and possibly addiction, based on the same misguided search for untold riches.
“An entire generation believes that with a little mobile phone they can win, that they can … beat the market,” he says.
“It scares the biggies out of me.”
Stephen’s concerns are based in part on the rapid emergence of cryptocurrencies into the mainstream.
When investing began in 2015, digital currencies meant nothing to most people.
Now, it is being promoted as a more democratic alternative to a monopolistic and exploitative global financial system.
As the Guardian revealed on Friday, crypto companies launched a record-breaking promotional campaign in London last year, targeting millions of passengers with 40,000 ads on billboards, in metro stations, in carriages and across the side of double-decker buses.
Advertisers have listed relatively obscure names like Hex, Kraken and Puglife about which consumers know little, if any.
Meanwhile, football clubs and players, not to mention the globally recognized celebrities, are promoting crypto investments daily via social media.
This week, reality TV star Kim Kardashian West and boxer Floyd Mayweather Jr. were named in a lawsuit alleging they helped promote crypto company EthereumMax, making “false and misleading” statements that left investors posting huge losses.
An Instagram post about EthereumMax, for Kardashian’s 250 million followers, was probably the most-watched financial promotion of all time, according to the UK’s Financial Conduct Authority (FCA) chief.
However, despite their rise – and warnings that governments could incur “unlimited” losses – crypto assets remain unregulated in the UK, awaiting Treasury review.
This means that the Financial Conduct Authority (FCA), the UK’s financial regulator, is unable to influence how the industry behaves.
While some trading platforms offer regulated digital assets – because they also offer more traditional financial instruments – cryptocurrencies and tokens are not.
Crypto-asset executives do not have to prove that they are fit and proper people to take people’s money. The companies they manage are not required to have enough cash to repay investors in the event of bankruptcy. They also should not be concerned about the FCA’s requirement that financial promotions, such as those posted on public transport in London, are fair, clear and not misleading.
In the midst of the marketing campaign, the Advertising Standards Authority is the only watchdog that has bared its teeth. It is investigating one Floki Inu cryptocurrency ad and has already banned an ad for Luno Money.
Luno’s announcement insisted that “if you see bitcoin on the bus, it’s time to buy”, contrary to the prevailing investment wisdom.
Luno Money told the Guardian she would welcome an “effective regulatory framework”.
But in the constant vacuum of censorship, experts fear that cautionary stories about addiction, such as those told by Stephen, are being drowned out by overly powerful and positive messages.
To monitor what kind of messages marketing teams are sending, the Guardian has created an experimental cryptocurrency wallet – containing a mixture of bitcoin, ether and shiba inu.
With bitcoin declining towards the end of 2021 and into 2022, after hitting all-time highs just weeks ago, the eToro smartphone trading app’s Twitter account remained fiercely optimistic.
Is Bitcoin on its way to a new high? , he asked when I started slipping. “We’ve seen bitcoin soar before. But could this be the person to take it to the moon?”
The answer, for now at least, was “no.” But cryptocurrency wallet holders are encouraged to stay positive.
“Your account is up 1.87% yesterday,” an app notification said, while the recession eased. “Have a good day. Share the news with everyone.”
Such a call did not appear on the more frequent days when the value of the Guardian portfolio plummeted.
“It’s a very strategic marketing ploy,” says Dr. Anna Lempke, one of the world’s leading addiction experts, professor of psychiatry at Stanford University School of Medicine and author of The Dopamine Nation.
“They encourage you to exaggerate the gains and ignore the losses, creating the false impression that there are more to be gained.”
When asked about this, eToro said it was “committed to helping retail investors interact with each other and enhance the learning and collaboration environment,” adding that its platform is not “playable.”
According to eToro UK manager Dan Moczulski, some users make their accounts public so that “all investments are visible to others, whether they are profitable or not.”
The company said it also provides educational tools, conducts knowledge-of-your-customer checks and encourages long-term and diversified investment.
But Dr. Limbeck is concerned that the social media component may be fueling compulsive behavior in cryptocurrency trading, an activity she says bears the hallmarks of addictive gambling products but without the recognized risk.
“When you mix social media with financial platforms, you create a new drug that is more effective,” she says.
Social media posts pushing cryptocurrencies often mention Fomo – fear of missing out – fueling a desire to share.
“You get this herd mentality where people talk to each other about what the market is doing, they win together, they lose together, … an intense shared emotional experience.”
“We’re seeing a slight uptick in dopamine, followed by a slight deficit that has us looking forward to recreating that state.”
This, she says, echoes the characteristics of gambling but with a crucial difference.
“It’s less of a stigma,” she says. “It has this socially recognized status as something that smart, maverick people do.”
It has become difficult to ignore the similarities with gambling.
GamCare, which operates the National Gambling Helpline, said it makes about 20 calls a week related to cryptocurrency. Callers reported trading 16 hours a day, making huge losses and struggling to overcome guilt.
As with gambling, where each addict is estimated to harm seven other people, many were suffering at the hands of another person’s habit.
One recounted how her partner’s business obsession led them to spend time away from family. Another said that his partner had gone into trading while recovering from alcoholism, and spent every waking hour making deals.
GamCare even dealt with young patients who bought cryptocurrencies in a desperate attempt to make enough money to get up the real estate ladder, only to lose out on life-changing sums.
In Castle Craig, where Stephen is receiving treatment, the first cryptocurrency addict arrived at the clinic in 2016, followed by more than 100 since then.
More and more people are isolated and doing this [trading]”Especially since Covid,” says Tony Marini, the clinic’s senior specialist therapist who is recovering from a gambling addict.
“It’s already hit ten times since 2016, so what will it look like in the next five years?”