The voice sounds groggy, like he just woke up. “Hello?”
It’s 1:30 p.m. where I’m calling from in Denver, but 3:30 a.m. in Hong Kong, at the crypto offices of Sam Bankman-Fried, or “SBF.” He’s already at his desk. He’s always at his desk.
“Did I wake you up?” I ask.
“No, I woke up a little before.”
SBF is a Wall Street trader-turned-crypto-trader-turned-CEO of FTX, a crypto derivatives exchange, which describes itself as “built by traders, for traders.” He’s always at his desk is not a figure of speech. SBF literally lives in the office, mainlining work, sometimes sleeping on a nearby bed, and sometimes sleeping under his desk. A recent photo on Twitter shows SBF slumped over two beanbag chairs, eyes shut, with the caption “A rare photo of @SBF_Alameda when he ‘goes home’ to sleep.”
See also: Jeff Wilser - 15 Ways to Stay Sane While Trading Crypto
SBF is happy to chat at 3:30 a.m. Time doesn’t mean the same to him as it does the rest of us. The crypto markets are open 24/7, and therefore SBF is on call 24/7. “This time works,” he cheerily assures me. I can hear the clacking of SBF’s keyboard through our call, and I’m guessing this has something to do with the price of bitcoin plunging $1,000 in the past 48 hours. (Note: This was in early September, months before bitcoin’s gallop to $15K and well before it was revealed that SBF was the second-largest donor to the Joe Biden presidential campaign, trailing only Mike Bloomberg.) “It’s been pretty busy,” SBF calmly says. “But I mean, so many days have been busy at this point, that … you know.” It’s not his first rodeo.
When SBF worked on Wall Street, his eyes were glued to the screen from 9:30 a.m. to 4 p.m. He acknowledges the non-stop cycle of crypto is “one of the exciting, but brutal, parts of the industry,” but considers it a necessary sacrifice. Sudden price movements could trigger opportunities, headaches or financial fires that must be snuffed.
SPF has six monitors at his desk. His eyes flick to check the prices and charts “every couple of minutes, sometimes much more frequently.”
Is he addicted to crypto? Are you? Am I?
“I’m addicted to crypto” is almost a cliché in the blockchain space. Nearly everyone talks about “falling down the rabbit hole” and becoming so obsessed they cancel plans with friends so they can listen to crypto podcasts, binge-watch crypto YouTube videos and even devour crypto white papers.
It almost feels like a rite of passage. You don’t really get crypto until you live it, breathe it, can’t shut up about it. Until you annoy all your friends with your new hobby. And you struggle to explain it and they can’t quite understand it but you assure your friends – you just know – that it will change the world.
That’s one kind of crypto addiction.
Then there’s the other kind of crypto addiction, a more specific flavor that has to do with checking the price. Some call it “The Itch.”
I first felt the itch in the island paradise of Bali, in January of 2018, when I met (and wrote about) an unlikely group of crypto traders. These were happy days for bitcoin bulls. Most had just made a ton of money – at least on paper – as the price of bitcoin exploded from $1K to $20K in less than a year. Some quit their jobs to trade crypto full time.
So like any good journalist, I bought some crypto in the name of “research.” First I bought $10 worth of bitcoin, just to get familiar with keys and wallets. I soon forgot about it. Later, to better understand the Bali traders’ obsession, I plunked down $200, and I bought some ethereum and a few other alts. Half the fun was chatting, joking and arguing with my new crypto buddies about what alts to buy – it felt like a mix of the stock market, gambling and fantasy football.
Then I put in some more. The price went up and I felt good. Then a little more. The price went down so I bought a little more, to BTFD. Rinse and repeat. I didn’t buy so much that I would be in financial trouble if bitcoin crashed and went to $0, but I did buy enough that whenever I opened my new favorite app, Blockfolio, I would feel a jolt of pleasure or a queasy stab of regret.
I needed to scratch the itch.
Maybe I didn’t sleep under a desk like SBF but I checked Blockfolio as soon as I woke up in the morning, even before Twitter, before Tinder. I checked it before I went to sleep. I checked it at 3 a.m. when I woke up to use the bathroom. And I checked it throughout the day.
This behavior wasn’t logical. It served no purpose, and I knew it served no purpose. I had planned to HODL, and there was no scenario where I would buy or sell, regardless of the price. My behavior made less sense than the always-vigilant price-checking of crypto traders like SBF, who had a good reason to pounce on volatility. In fact it made no sense. Yet, I kept scratching the itch.
And I know I’m not alone. Hard data is elusive, but nearly everyone I’ve spoken to who has purchased cryptocurrency – in any meaningful amount (more than a $10 trial, say) – confesses that they check the price more frequently than they should. The temptation is irresistible.
“How often do you check price of bitcoin?” David Nage, principal at Arca investment firm (and CoinDesk writer) recently asked on Twitter. Just a smattering of the 91 replies: “Not very much, every other minute at the most”; “All day and night”; “39,688,562 times per hour. Sometimes more”; “It's always nice to check it when you're at work. When everything totally sucks. Then you smile to yourself and say yeah the only reason I'm here is to continue stacking more sats.” Perhaps the most candid response: “Whenever I go for a … big one.”
Most of these replies are likely jokes. Yet, the addiction isn’t always harmless. Take the case of Justus Gash, a 30-year-old who lives in rural Oregon. He first dabbled with crypto in 2016, spending around $250 on bitcoin. At first he only checked the price occasionally. It wasn’t a big deal.
Around then he cultivated another hobby: gambling. Oregon has slot machines in bars. In 2017, says Gash, “something switched” inside of him. His casual gambling morphed into compulsive gambling, and he eventually racked up an ocean of debt.
He soon craved variety. “I was looking for alternatives to slot machines, and I got really into crypto,” says Gash. He began mining ethereum and other alts, and taught himself how to trade. Added bonus? Gash had recently earned a promotion at work – a $10/hour raise that elevated him from the factory floor (where he worked with his hands) to CAD design, where he now sat in front of a computer. It was a big promotion, a big step up and he was excited. “All day at work, now I could use computers freely,” he says, and he spent many of those hours staring at crypto charts.
Gash had already lost much of his money to gambling, and now he hoped that trading crypto could fuel a financial comeback. “My plan was to try and fix my gambling debts using crypto speculation, but all it did was keep my gambling addiction alive, and eventually led to greater gambling addiction,” he says.
One day, while checking the charts at work, he scored a 100x trade. 100x! He felt good. 100x. The trade itself wasn’t even that big – he guesses he made around $120 – but the rush was real.
So were the consequences.
On the day of that 100x trade, his boss caught him staring at the crypto charts. “That doesn’t look like your work,” his boss told him. “What are you doing?” And his boss did not forget. At Gash’s next performance review, the crypto incident came up, the review went poorly and Gash now says that “it cost me my job.”
Technically the performance review did not get him fired, but the taste was so bitter that he decided to quit … and to cash out his 401(k) – $20,000 – on an epic gambling binge. “It ruined my life,” he says. After the four-day binge, Gash finally checked into a gambling treatment center. A musician on the side, he sold his guitars to help cover the losses. He estimates he lost over $70,000 from gambling in a two-year span. (He says he didn’t lose as much on crypto because he didn’t have as much – he had already lost it gambling.) He moved in with his parents, who began to sense that his crypto addiction was just another type of gambling. “I don’t want to ever hear about crypto,” his parents told him.
Gash has a hard time separating the two. “When I first got into cryptocurrency, I didn’t see it as gambling,” he says, but eventually he changed his tune. “Crypto is presented in such a way where it doesn’t look or feel like gambling. But it’s the same rush. It’s the same mechanism.”
Your brain on crypto
Gash’s experience, which is almost certainly more exception than the norm, does square with research from Rutgers University that showed a strong link between “problem gambling” and crypto trading, as reported by Leigh Cuen for CoinDesk.
The study found the gamblers who invested in high-risk stocks and crypto reported higher levels of depression and anxiety than the other groups, but the study’s co-author, Dr. Lia Nower, cautions against drawing too many conclusions. “This was an online sample of participants, who tend to have higher levels of problem behaviors,” said Nower. It’s also uncertain if the link between crypto investing and depression/anxiety is causation or correlation. “Do people who have anxiety or depression look for the ‘high’ that comes from action trading and crypto and high-risk stocks fulfill that need?” Nower asks. “Or do the ups and downs of crypto and high-risk stock trading contribute to changes in mood?” More research is needed.
Just how common are these unhealthy addictions? We have little more than anecdotes and online clues. After the price of bitcoin tumbled from $17K to $13K, in the cryptocurrency subreddit, someone posted a simple message: the phone number to the U.S. National Suicide Hotline (1-800-273-8255). The thread exploded. Clearly, this touched a nerve. There were jokes, notes of concern and 38.9K upvotes and 3.1K comments. “This market is almost like paying roulette or craps sometimes,” noted one writer. “If you can’t handle 30% loss, you don’t deserve 600% gains,” said another.
See also: Ben Munster - The Men Who Stare at Charts
Others put crypto in perspective, noting that the problem of reckless investing existed well before Satoshi Nakamoto. “Some people dumped in money from a second mortgage. That’s bad, and that happens in the stock market, too. This isn’t new because of crypto.”
In the summer of 2018, a rehab treatment center called Castle Craig in Scotland opened a division specifically to deal with cryptocurrency addiction. “It's still relatively rare to find someone whose sole addiction is trading in bitcoin but it’s very clear to us that this is something on the increase,” a Castle Craig therapist told Vice at the time.
Flash forward two years and it still seems rare. Over email, a spokesperson for Castle Craig said crypto addiction tends to be a subset of overall gambling addiction, and that the center treats an average of 10 people per year who “have gambled with cryptocurrencies.” She added, “At the moment our cryptocurrency addiction program is paused due to our specialist therapist being ill, and also due to our clinic experiencing a lower capacity than normal due to the social distancing measures of the coronavirus.”
The website of Castle Craig cites research from Dr. Mark Griffiths, professor of Behavioral Addiction at Nottingham Trent University, to explain crypto addiction. So I reached out to Dr. Griffiths for clarification. He’s quick to point out that actual cryptocurrency addiction is not something he has explicitly studied, and to his knowledge it’s not something that anyone has rigorously studied. “I’ve looked, and there’s not one single case study of somebody who has been treated for cryptocurrency addiction,” says Griffiths.
But he does have theories. He can see how, theoretically, cryptocurrency trading can fit into the addiction framework. “Addictions are all about what we psychologists call reinforcements, and you might call rewards,” says Griffiths. “You cannot be addicted to something unless you’re constantly rewarded for it.” You can’t be addicted to something that only happens once a year, like St. Patrick’s Day. And activities with higher event frequencies – like a slot machine, where you can play 12 times a minute – can accelerate the problem. Since the prices of crypto are constantly in flux, every click of Blockfolio brings the chance of another reward. Click after click after click.
Let’s look at the mechanism a little closer. The potential for addiction happens in a chunk of the brain called the “dopaminergic system,” explains Dr. Veit Stuphorn, a neuroscientist at Johns Hopkins University, who studies how the brain behaves when we gamble. “There are something like 100,000 neurons in the bottom of your brain, distributed over a number of different small nuclei,” Veit explains. “When they get active they sort of spritz out a little bit of dopamine.” The key concept: There’s a baseline level of dopamine, and a baseline level of expectations. When something happens that’s better than you expected, you get more dopamine. If what happens is worse than you expected, you get less dopamine. Variations to the baseline matter.
What does this have to do with crypto? Veit says that in gambling – or in crypto trading – “there are a lot of instances where you get a little boost of dopamine because it’s uncertain. There’s always some mismatch between what you expect and what really happens.” This is why you wouldn’t become addicted to a fixed annuity that paid you a locked percentage every week, even if that return was lucrative. No one gets addicted to Treasury bills. But if the value of that asset seems to forever yo-yo, and has the power to make you rich, or to destroy you, and you can check it every second? Maybe you will.
You can experience this kind of price addiction, or maybe it’s simply “the itch,” without dire consequences. Many traders feel it all the time. One crypto-trader who has a day job at a prestigious, well-known financial institution – let’s call him Brian – says the sheer returns of crypto make it hard to look away. Brian works with wealthy Fortune 500 executives all the time. He does this at his day job, while he invests in crypto on the side. “My $100 million clients are super happy if we can beat the market with a 15% year. They say, ‘15%, f**k yeah, you’re the man!’” And when Brian hears this from the client, he thinks to himself, amused, In crypto I made 10% *today*.
Brian feels he’s in control of The Itch. “I’m not a very addictive person, and I don’t need that dopamine hit. I don’t need that high or low.” Brian doesn’t do social media, and says checking crypto is his version of that particular vice. “Some people sit on the toilet and they check social media. I check the markets. For other people, if there’s a break in the conversation they check Instagram. I check the markets,” he says. Perhaps checking crypto prices is simply anti-social media.
How often, exactly, does Brian check the price of crypto? He pauses, thinks. During his workday, when Binance is open all the time, he says, “Every 30 seconds,” and it’s not entirely clear if he’s joking. Then it’s clear he’s not. “My job is to pay attention to the stock market all day long,” he says. “Literally all day – looking at markets, understanding why things are moving. And I’m also keeping track of the crypto world.”
Brian views crypto as a net positive in his life. It’s bringing him a level of financial security that even his cushy finance job doesn’t provide. Yet, he does see a subtle downside to The Itch. Before crypto, Brian used to pride himself on rarely checking his phone – he liked being present in conversations. Now that’s tougher. “It does hurt who I am as a person, who I want to be,” he says. “It hurts my mindfulness. My ability to be in the moment.”
Is he addicted?
Brian wouldn’t use that word, instead calling it a “compulsion, a compulsion to check the markets. It’s definitely a fixation.”
SBF, the trader/CEO who sleeps under his desk and has six monitors, has a similar reaction. “Do you feel that you have a crypto addiction?” I ask SBF point-blank.
“I think what I would say is more that I have a duty to my company and my customers, to do a good job,” says SBF. “And to do that I have to be responsive, and that means being always plugged in.” He acknowledges this takes a toll on things like friendships, dating and relationships because “you don’t have that much bandwidth.”
This is a mindset shared by crypto trader Kevin Zhou, whom I contacted for CoinDesk’s piece on "15 Ways to Stay Sane While Trading Crypto." He shrugs off the idea of work/life balance. “To really excel at a craft, you literally have to be unhealthily obsessed with it,” says Zhou. “Because if you aren’t, there’s going to be some crazy person out there who is, and that person will often beat you.”
In addition to this Obsession Arms Race, crypto has other unique properties that make it ripe for addiction. “Part of the lure of crypto is that you can leverage your money with a lot less regulation,” says Naeem Al-Obaidi, a crypto “YouTube Influencer” with 102K Instagram followers. (“I hate the label ‘Influencer,’” he tells me with a laugh, although you suspect he can’t hate it that much.) Al-Obaidi has been trading since 2014, and he now runs a trading group called Traders Profit Club he says has 20,000 active members. He’s funny and charismatic and exceedingly friendly on our call. He’s 22 years old.
Al-Obaidi explains that in traditional finance you need to be an “accredited investor” – earn $250K of yearly income, or have $1 million in net worth – to use financial tools like leverage. To leverage crypto you don’t need $1 million, you just need a phone. “Most of the volume in crypto exchanges is leveraged,” he says, which, of course, means the potential for higher returns and bigger risks. Or in the language of the neuroscientist, with leverage there’s more potential “variance from the baseline,” which can unleash more dopamine in the brain.
Perhaps “addiction” isn’t a binary term and instead lives along a continuum. “I wish I did check the price less, but I don’t know if I would say I’m addicted,” says the trader. Like Brian, he agrees it can hijack mindfulness. “Attention is the scarcest resource we have,” says the trader. “In a moment of silence, the human mind moves towards the lowest common denominator. It wants to pull the lever of the slot machine.”
The pleasure rat
That idea – pulling the lever – reminds me of a seminal experiment in neuroscience, from the 1950s, about the “pleasure rat.” Psychologists connected rats to a system of levers. When the rat pressed the lever, that action pinged the rewards center (or pleasure center) in the rat’s brain. The rats like pressing this lever. They loved it. The rats pressed the lever so much they couldn’t stop, even when they were hungry and could see food. The rats pressed the lever even when they were in heat and would have otherwise mated. Some rats pressed the lever 2,000 times a day – choosing not to eat – and had they not been unhooked by the scientists they would have died of starvation.
Back in Bali when I checked Blockfolio obsessively, was I the rat pressing the lever? Again, there was no reason to check the price. I had no plans to buy or sell. At the time I knew it was dumb.
But getting back to the question I posed the other traders … does that count as capital-A Addiction?
“There are no clinical criteria for cryptocurrency addiction,” says Lia Nower, who’s Rutgers’ director of the Center for Gambling Studies. “However, there are known signs and symptoms of gambling addiction, and those provide a good parallel.”
Fair enough. So let’s look at gambling. The Mayo Clinic defines compulsive gambling as “the uncontrollable urge to keep gambling despite the toll it takes on your life.” According to the American Psychiatric Association, a gambling disorder “involves repeated problematic gambling behavior that causes significant problems or distress. It is also called gambling addiction or compulsive gambling.”
Dr. Griffiths gets more specific. He says that for something to be a true addiction, it needs to check off six boxes:
1. The activity is the single most important thing in the person’s life, and he or she does it to the neglect of everything else.
2. They use it as a way to modify their mood.
3. They grow a tolerance, and need to do more of it to get the same initial high.
4. They go through withdrawal if they can’t do it (irritability, anxiety, panic attacks).
5. Conflict. “This is the most important,” says Griffiths. The activity is so important that it can cause conflict in your life and interfere with jobs and relationships.
6. Relapse. If you manage to give up this activity for two days, two weeks or even two years, when you start engaging with it again you’re right back in the addiction.
“To classify as an addiction, you have to endorse every single one of those six,” says Griffiths. “The good news is that for most people on most activities, they can’t possibly endorse all of those six, so the behavior might be problematic, without being addictive, in terms of how I define it.” He adds that people often toss around the word “addiction” casually. He uses social media as an example, noting that many people like to say, I’m addicted to social media! “Well, that’s not addiction,” he says. “That’s habitual behavior. What you’ve described is habitual behavior.” Video games could be in that same bucket.
Griffiths adds that these six questions are simply his own classification, and “you can speak to 50 different psychologists and they’ll give you 50 different definitions for addiction.” Nower says the signs of problem gambling include “preoccupation, withdrawal, tolerance, losing relationships, loss of control, lying, chasing losses, gambling to alleviate distress and seeking financial bailouts.”
NOTE: This is not intended as medical or psychological or gambling advice. If you have concerns over possible addiction – for yourself or someone else – contact official resources like the SAMHSA [Substance Abuse and Mental Health Services Administration] confidential hotline.
My compulsion to check prices eventually faded, thank God, and I quickly realized I was better suited for crypto journalism than crypto trading, although every now and then – even to this day – I still wonder, What If? (Check back soon for the in-depth piece where I give crypto day-trading a real shot, to show readers the highs and lows. Kidding. I think.)
And in the end, for many, perhaps “crypto addiction” is really more about the addiction to learning. After all, blockchain is an intellectual feast of tech, economics, philosophy, mathematics, social activism, computer science, game theory, counterculture and psychology, with just a dash of greed.
For example, Tom Buonincontri, 28, joked on Twitter that “I never knew I had an addiction problem until I went down the Bitcoin rabbit hole.” Is he an addict? I reached out to him to see exactly what he meant.
Buonincontri hosts a crypto podcast called DYOR (Do Your Own Research). He clarifies to me the bitcoin rabbit hole “is so addictive because of the many subjects it encompasses.” He rarely checks the price. “Do I believe I’m addicted? No. I believe the current economic environment is a mess, and bitcoin has the potential to be a real solution.”
Or perhaps it’s a mix of intellectual curiosity and the potential to get rich. Emmanuel, for example, lives in Bogata, Colombia, and has a 9-5 job with the government, and says that literally every spare minute is filled with crypto. (He asked not to use his real name, as that could cause repercussions at his job.) As soon as he wakes up, Emmanuel flips on a crypto podcast while showering. (His wife hates this.) He listens to crypto podcasts while driving. He’s always glued to the phone to check the charts, so often his wife thought he was having an affair.
Emmanuel says that most of his “addiction” is a thirst for knowledge and to slake his crypto curiosity but yeah, sure, he concedes price is part of the stew. When the price flirts with cracking the $10K range, he says, “You start freaking out, wishing it goes to the all-mighty $20K and beyond.” When that happens the phone isn’t enough, and he puts the chart on his TV, “tracking every second if it.”
The price can impact his emotions. “When the price is going up, I feel the equivalent of dropping a heavy bag, relief,” he says. He explains that the bag is economic uncertainty. “Being able to provide for my family is a great concern. I don’t want a Lambo … I just want to quit feeling like a rat on a maze.” And so, finally, this industry offers yet another paradox: With crypto you can be a rat pressing the lever, and with crypto you can stop feeling like a rat.