It is currently unwise to rely solely on cryptocurrency as a means of financial support. Some people raise doubts about it, and the reason is that crypto winters can have a negative impact on one’s mental health. Rather than relying solely on one source of income, one should consider exploring all of the available options. Since we now live in an information age, people have access to a wide variety of career options, and finding them is a breeze.
People, especially in the wake of the COVID-19 pandemic, have figured up creative ways to make money without leaving the comfort of their homes. While cryptocurrencies are one such source, when people talk about their financial success in the bitcoin trading market, it breeds envy and encourages others to do the same.
Just as individuals are drawn to food and water as a means of survival, so too are they drawn to money as a means of satisfying their more frivolous desires. Due to the ever-changing nature of the cryptocurrency market, investors need to keep a close eye on their holdings at all times to avoid losing money.
As a result of not being able to sleep, feeling exhausted, developing anxiety, experiencing despair, and becoming addicted are just some of the mental health problems that can arise from this kind of worry.
Now, you’ll learn what a crypto winter is, how to deal with crypto addition, how to curb your addiction, and how to deal with the emotions and stress that come along with it.
The Mystery of Crypto Winter Exposed
When the cryptocurrency market performs poorly, it is said to be in a “crypto winter.” There are some key variations between this and a crypto bear market, which will be explored further down in the post, but for now just know that the two are quite similar. Many cryptocurrencies might expect severe price drops during a crypto winter, which is generally viewed as a negative phenomenon.
Investors who are trying to make a career from trading cryptocurrencies and are hence somewhat dependent on their portfolios may experience mental health problems as a result of crypto winter events, according to studies. When looking back at the cryptocurrency industry’s history, periods of “crypto winter” are frequently readily apparent, as the market value of crypto assets drops by double digit percentages.
In retrospect, we can see that crypto winters have occurred frequently. Using the market condition from 2017 to 2020 as an example, asset valuations fell very dramatically from their average prices, but then the market unexpectedly changed and prices exploded to new record highs, leading to the emergence of a crypto bear market.
However, it is difficult to foresee future price fluctuations in the cryptocurrency market due to its volatility, so investors should proceed with caution. To learn more about this, stay tuned.
There are problems with crypto winters.
The stock market as a whole has a long history that reveals numerous ups and downs, but the situation with cryptocurrencies is different. The cryptocurrency market is still in its infancy, and it has no where near the same level of historical significance as the stock market.
The problem here is that no one can predict how long a crypto winter will last as the cryptocurrency economy is still in its infancy. A crypto winter could endure for a few years, or it could last until the price valuations of some assets plummet to practically zero, with the added risk that the price valuation of some assets would never recover, causing investors to lose money and become vulnerable to mental health difficulties.
The use of regulatory measures is another concern. There are presently no formalized regulations in place for either cryptocurrencies or cryptocurrency exchanges. Even while crypto-related businesses are increasingly becoming subject to regulation, the vast majority of firms are still able to do so without restriction.
Lacking appropriate restrictions, fraudulent activities and schemes proliferate unchecked, necessitating heightened vigilance on the part of users while interacting with organizations and investing in cryptocurrencies; the latter’s genuine intentions can never be known. Since cryptocurrencies have no intrinsic value and are instead utilized for unlawful purposes including money laundering, fraud, and scams, many in the financial industry believe they should be outlawed.
The crypto winter is not the same thing as a bear market.
Bear markets are periods of falling stock prices that are claimed to occur for a variety of economic reasons. Bear markets and crypto winters, while sharing many characteristics, are not directly tied to one another.
Investors use a variety of technical tools to determine the prices they seek, despite the fact that the majority of stock valuations are determined by the many bodies that oversee the market. One key distinction between stock assets and cryptocurrency assets is the relative lack of sophistication of models based on price valuations.
Despite their differences, bear markets and crypto winters can both possible at the same time, as seen in the year 2021 when both the stock market and the cryptocurrency markets faced major losses for the same reason.
Investors should always be prepared for the worst, since there is no telling which cryptocurrency’s price could collapse, even if some assets are barely affected by a crypto winter and the rest are not.
Crypto Winter Predictions
Predicting when a crypto winter will begin or finish is often not taken seriously as a realistic prospect. Nevertheless, investors can benefit from maintaining a keen watch by monitoring news, community trends, and social media sites like Twitter and Reddit for signs of a crypto winter so that they can adjust their portfolios accordingly. Still, it’s vital to bear in mind that crypto winters can emerge unexpectedly, and their duration is anyone’s guess.
Addiction to Cryptocurrencies
Now that we have a solid grasp on the concept of crypto winters, we can go on to investigating the impact of crypto addiction on psychological well-being.
A crypto addiction is characterized by an inability to control one’s thoughts about cryptocurrency trading and attempts to profit from it. You may have a problem with cryptocurrency if keeping tabs on and trading digital coins becomes more important to you than getting enough shut-eye, maintaining your health, or building your wealth.
It also involves losing the realization of taking a break and having the constant sense of researching the market and news surrounding the bitcoin field, all for the attempts to get advantage in trade over others.
Bear in mind that while cryptocurrency and other material possessions themselves are not considered addictions, being preoccupied with them to the exclusion of all else is. Addiction-inducing features include the ease with which one may monitor their holdings and investments in real time and the stimulation provided by the nearly daily posting of engaging content.
Apps for exchanging cryptocurrencies on mobile devices, as well as films discussing the topic on platforms like YouTube, are just a few examples.
You may also have a bitcoin addiction if you find yourself preoccupied with reading about new developments in the cryptocurrency market. Other symptoms of severe crypto addiction include being unable to quit trading, although without a suitable plan, taking thrilling risks, and failing to pay attention to other people in social situations because one is too preoccupied with the market.
As a corollary, developing mental health issues including stress, anxiety, sadness, and mood instability as a result of trading cryptocurrencies is a symptom that the trader is overly invested in the crypto sector and has little understanding of it.
Intervention for crypto-dependent individuals
Even if crypto addiction becomes a serious problem for you, there are many strategies to cut back on your use, which can not only benefit your social life but also your mental health in remarkable ways.
As a first step toward overcoming cryptocurrency addiction, you should uninstall any and all cryptocurrency-related apps and stop reading any crypto-related news or content. While cryptocurrency investments may prove fruitful, most experts advise against making them your primary source of revenue.
It’s not just the crypto industry that can benefit from your writing and coding abilities; other big sectors could also use your services. Learning new skills, though, can help you find a rewarding job in the cryptocurrency industry if you’re enthusiastic about the field.
If, for instance, you want to educate yourself about the growing metaverse, you can set aside some time every day to do so. The metaverse is home to several disciplines that offer diversions from trading, such as artificial intelligence (AI), virtual reality (VR), augmented reality (AR), digital environment design, and many others.
Taking a significant break by going on vacation or attending a special event is another method of lowering addiction. Your existing relationships with loved ones will improve, and you’ll open up to potentially life-altering new contacts. Communicate with someone you trust and tell them about your struggles and worries. You’ll gain a lot of insight, and that’ll help you heal from your addiction.
Psychological repercussions of crypto loss
Investors in cryptocurrencies may hold a wide range of mentalities. Those who have been through it before can take a loss in stride, but those who haven’t may struggle to recover emotionally and psychologically, leading to problems like stress and despair.
Even if they have a solid grasp of cryptocurrency and the trading process, rookie traders sometimes let their emotions get the best of them when they incur a loss. This causes future results to be substantially worse, which in turn causes further financial hardship. Loss aversion refers to the psychological phenomena in which the emotional impact of giving up on a goal is greater than the motivation gained from making an initial effort to achieve the goal.
Consequences of a catastrophic loss in cryptocurrency can be much more far-reaching than those associated with even modest fluctuations in value. In most cases, a person can get back on their feet after suffering a minor loss by making some short-term adjustments to their consumption habits or by putting in more hours at the office. However, in the case of major losses, recovery is only possible if the market manages to provide substantial returns, which may take a long period of time to achieve.
Therefore, traders develop stress, worry, and other mental health issues as a result of their enormous losses that they are unable to recoup.
The LUNA cryptocurrency serves as a useful illustration of this point. At one point, the LUNA currency was the most widely used in the world, but then disaster struck. In a single day, the value of investments in LUNA plummeted by more than 98%, sending shockwaves across the market and causing widespread panic among investors who hadn’t done their homework.
These kinds of things will keep happening as long as there are ticks on the clock, leaving individuals who invested seriously with massive losses and mental health issues.
How to deal with feelings in the crypto world
If you let your emotions guide your decision-making, you’ll end up with outcomes that don’t make any sense. However, because to the unique ways in which each person’s brain processes information, bitcoin trading becomes an activity that may actually be fun and exciting.
Fear of missing out (FOMO) and fear, uncertainty, and doubt (FUD) are two behavioral factors that have been linked to increased likelihood of making irrational decisions that make emotional sense but are at odds with logic. As a result, it is crucial to have a firm grasp on your emotions in order to prevent unnecessary risks and avoid investment loss.
When trying to purchase or sell cryptocurrencies that aid in your strategy to make big, it is crucial to eliminate the consideration of emotions as a step toward lowering the impact of emotions. It is highly recommended to avoid cryptocurrency trading if you do not have a thorough understanding of the risks associated with digital currency investments and the volatility of the crypto market.
Learn as much as you can about the cryptocurrencies you’re considering instead than blindly following the advice of others. Having the necessary knowledge and skills to deal with the cryptocurrency will greatly boost your chances of success, yet there is no guarantee that you will be successful.
Seeking out a trading platform that can aid you in making the proper judgments and provide you with many means of attaining your goals is another technique to de-emphasize emotions in trading decisions. In addition, it is crucial that you monitor your investment activity and keep your spending in check. The greatest strategy is to invest only the amount of money that you are willing to lose without suffering a significant hit to your total worth.
Once a decision has been made after careful consideration, it is essential to refrain from overspending due to emotions like fear of missing out (FOMO) or uncertainty (FUD).
If you’re planning on using a platform’s services, it’s a good idea to look for one that lets you limit the total amount of orders at once. With the limit order option engaged, you can prevent financial loss and help lock in gains in the event that the value of a particular asset drops. By setting an order limit, you can decide at what minimum price you’re willing to trade your cryptocurrency.
Discussion and Conclusions
Winters in the bitcoin market are a normal aspect of the industry, and they can and do last for varying durations of time. To maintain financial security and emotional well-being during difficult times, it is essential to educate yourself on effective coping strategies. Addiction to bitcoin trading can lead to mental health problems like anxiety and despair, so it’s important to not give the addiction too much power.
Emotions should also be absent from cryptocurrency trading, since they can bring about unintended outcomes and losses that can be quite painful. Combating crypto addiction and making rational financial decisions can be done in a number of different ways. Both will do more harm than good and prevent you from reaching your goals in the cryptocurrency industry.