Bitcoin Anonymous: How crypto trading created a new generation of addicts

Adam had it all worked out. A professional cryptocurrency trader, he had so far made a fortune of around £700,000. Last spring, Adam nailed down a plan to make himself a millionaire. Alone in his penthouse flat in Canary Wharf, fuelled by four grams of cocaine a day and endless shots of Whitney Neill rhubarb gin, Adam was paying close attention to Dogecoin.

A digital currency based on a meme about a funny-looking hound, Dogecoin had been frequently promoted by Elon Musk, the billionaire founder of Tesla. Musk had been speaking about Dogecoin throughout 2021, calling it “the future of cryptocurrency” and “the people’s crypto”. His statements about Doge brought it so much attention that a single tweet could end up doubling the currency’s value.

Musk’s absurd tweets — other examples of which include “I put the art in fart” –– were impossible to predict. If only a cryptocurrency trader knew when Musk would sing the praises of Doge, they could buy in advance and see their investment skyrocket.

So when Adam, now aged 29, saw that Musk was going to appear on Saturday Night Live, America’s favourite comedy show, he saw an opportunity. Surely Musk would talk about Doge on the programme and punt the currency’s price into the stratosphere. To the moon, as amateur day traders like to say.

Elon Musk torpedoes dogecoin’s future as he jokes on SNL

Adam increased his investment in Doge to around £50,000. He even took a leveraged position in the currency. This was a riskier manoeuvre that meant he stood to win much more if the value of Doge went up, but lose heavily in the event that it went down.

He also decided not to put in a stop-loss order. Some traders, when they are executing a high risk trade, will put in a stop-loss so that if their investment drops beneath a certain threshold, they will immediately cash out to save themselves from further losses. But the value of cryptocurrencies is so volatile that it can rapidly fall before shooting back up again. Adam thought that a stop-loss order might cut his trade short before he was due a huge profit. So he went in without one.

Ahead of the SNL broadcast, he felt his position was airtight. “Everything aligned,” he remembers. A popular investing platform called eToro announced that it would start trading Doge, attracting more traders who wanted a piece of the currency. All the crypto experts who Adam listened to were bullish. He belonged to a number of paid-entry advice channels on Telegram, a messaging app, where the chatter was non-stop about Musk and his SNL hit.

May 7th, the day of the broadcast, went by in a blur of alcohol. Back then, Adam would frequently go out boozing in the afternoon before coming back at night to have a crack at commodities in the East Asian markets. He picked up a couple bags of cocaine on his way back to his flat. His pre-trading routine — to “get into the zone”, as he puts it — consisted of snorting four or five lines and plugging his laptop into a 40-inch curved monitor. SNL airs at 11.30pm New York time, or 4.30am in London. Just before dawn illuminated the great glass towers of London’s financial district, Adam was poised to watch Musk boot the price of Doge into space.

"There's a very thin line between investing and gambling..."

Musk bounded onto the stage and beamed at the crowd. “We’ve got a great show for you tonight!” he said. The format of the programme is a series of sketches. After his opening monologue, Musk appeared in a scene with the SNL cast member Michael Che, both playing news anchors.

Che asked Musk to explain cryptocurrencies, and he responded: “They’re a type of digital money but instead of being controlled by a central government, they’re decentralised using blockchain technology.” A promising start.

Next, Musk said prices of cryptocurrencies like Dogecoin were “soaring”. Even better!

Then Che asked what Dogecoin is, and Musk said: “It’s the future of currency. It’s an unstoppable financial vehicle that’s going to take over the world.”

Che asked if that meant Doge was some kind of scam. “So it’s a hustle?” he said.

Musk replied: “Yeah, it’s a hustle.” Then he cackled.

Adam looked on in horror. What was Musk doing? He looked at the price of Doge, and saw with despair that it was plummeting. It lost 24 percent of its value in 24 hours, and kept falling in the weeks to follow. Because of Adam’s heavily leveraged position, he lost £250,000 in the space of an hour.

Adam was convinced he could win his money back, and made a frantic series of trades. It did not work. Instead, he went on a losing streak during which he lost everything. He drowned his losses in cocaine and booze, selling his possessions to free up money and pour it into cryptocurrencies and commodities and forex. He had spent four years trading, but in a span of weeks lost his fortune of around £700,000. By this point he had pushed away his friends, his family, and sacrificed his health. He realised, like an increasing number of people today, that he was addicted to trading.

A Paraclesus Recovery Bentley in front of the luxury Dolder Grand resort in the Swiss countryside. Paraclesus has seen a huge surge in crypto addict admissions.

Gentleman’s Journal has been investigating the rise of this new form of addiction. We have spoken to addicts, crypto experts and healthcare professionals to understand this growing phenomenon.

Tony Marini, a therapist at Castle Craig, a residential rehab outside Edinburgh, says the first year he treated someone for trading addiction was in 2016. That year, one crypto addict came to the centre. In 2021, Marini saw 126 patients addicted to crypto and day trading. Halfway through 2022, he has already seen around 80 patients. Eight of ten patients are men, he says, and most of them are aged between 18 and 40.

Paracelsus Recovery, a luxury Swiss rehab clinic that costs £80,000 per week, estimates that their referrals have risen by 300 percent since 2018, citing the interest in trading as a lockdown hobby.

The price of Bitcoin, the best known cryptocurrency, at the beginning of Covid stood at around $6,500. During the pandemic, it reached a high of $69,000. Captivated by the prospect of making a crypto fortune, untold numbers of people have made accounts on trading apps and subscribed to financial advice channels on YouTube and TikTok.

Bitcoin only came into existence in 2009, so the understanding of crypto addiction is still relatively limited. However, experts say that the rush of trading cryptocurrency is much more potent than casino gambling because of how unstable the markets are.

“It’s so volatile — going up and down so quickly — the dopamine is going much quicker into your brain,” Marini says. “It’s like a hit of cocaine.” The effect can be just as destructive, he adds. “We’ve seen people doing illegal things — one patient embezzled £1.5 million from his company because he couldn’t stop trading Bitcoin.”

Marini says crypto addicts are rarely just hooked on trading. They frequently become drug addicts, using substances like amphetamines to stay up late to trade, and then drinking alcohol to numb the pain of losses. They also tend to form habits like compulsive buying, using pornography and paying for sex. “There’s not much of a difference between someone addicted to cocaine than someone addicted to gambling,” he tells me. “It hits the same reward paths, the pleasure-seeking paths of your brain.”

"There’s no difference between someone addicted to cocaine and someone addicted to crypto trading"

He sees crypto addiction beginning with a winning phase, when successful trades inspire feelings of excitement, before progressing to a losing phase, when traders get sucked into their phones and laptops for days at a time. Next is the desperation phase, which is as bad as it sounds.

Marini introduced me to Steven, one of his patients, who says he lost a fortune through day trading and crypto speculation. Now aged 50, Steven became an amateur trader after the 2008 financial crisis, hoping to buy stocks at a low price and hold them until the market recovered so he could sell them at a profit.

He read books about amateur trading, watched YouTube videos and started to analyse the Dow Jones and FTSE 100. Beating the system became a compulsion, as he describes it. “I would stay awake for 24, 36 hours waiting for the perfect point to trade to prove that I was right,” Steven says. “It was more important to beat the market, and to be right, than getting the money and showing you could win above the casino.”

He stuck in more of his money, undertaking riskier trades, then he learned how to do spread betting, and trading cryptocurrency. But he was unlucky — no matter how much research anyone does, trading is still a form of gambling — and Steven’s losses started to rack up. He extracted money from his buy-and-hold positions to make up for his errors. It began a cycle of trading and losing that incinerated his fortune.

“I did not think for one minute I would become addicted,” he says. “I lost my career, my confidence, my life in London, and I had lost, sold and gambled all the flourishing stocks and shares that I held. If I bought and held in 2009, I calculated that by 2014 I would have made a million, maybe more.”

Adverts for crypto trading platforms on the London Underground

As his therapist Marini describes, an addict can rationalise their habits, and even though they might be hundreds of thousands of pounds in the hole, they will think that by continuing they can reverse their fortunes. “If you’re in that desperation phase,” he says, “and you know rationally that you need to stop, an addict can think, ‘If I put this money into crypto, I’ll make more’.” He cites the case of a former patient who became addicted to trading and lost their entire pension: €240,000.

Shakur Abdirahman, the founder of Perfect Your Trading, a crypto education platform, says he has met too many people who have become addicted in this way. Adam, the trader in Canary Wharf, is one of his friends. Abdirahman tries to teach his clients about the “rollercoaster” nature of cryptocurrency trading. “On a day-to-day basis, you can’t predict how it’s going to go,” he says. He advises wannabe traders to watch out if they start feeling undeterred by losses — a trading addict will “keep coming in regardless”. “Many people see it as investing and not gambling,” says Abdirahman. “But there is a thin line between those two.”

Unlike Steven, Adam wasn’t just motivated by beating the house. He wanted the lifestyle of a successful crypto bro. Adam comes from a comfortable home — his family owns a decent real estate business, and he says he had a “nice upbringing” with holidays — but he wanted to reach new heights of luxury.

When he started to make money, Adam loved walking into a fancy restaurant in leisure wear — all the other diners wearing suits and dresses — and splurging on an expensive dinner. Or strolling into a designer store and dropping ten grand on new clothes.

“There’s no feeling like it — it’s the highest level of euphoria..."

He lists all the famous brands he purchased: “Dior, Balenciaga, Gucci, Alexander McQueen, Alexander Wang”, and describes trips he would take to the swanky shopping centre Bicester Village to buy tailored suits for him and his friends. On one occasion he paid for his mates to take a lavish trip to Las Vegas to “show them the lifestyle” he was enjoying.

Returning from one holiday in Dubai, Adam walked into a watch store with his brother and bought two Rolexes costing £35,000. “There’s no feeling like it,” he remembers. “It’s the highest level of euphoria or ecstasy. Sometimes I’d like to go in — super casual, wearing sliders — and look at their expressions when I came to pay.”

But the purchases would come with a sting in their tail. Adam’s fortune was unpredictable — the price of cryptocurrency is so unstable that his portfolio could hit £750,000 but drop to £300,000 in a day. If his investments went south, Adam knew that he would have to sell his luxury possessions to free up more money for trading. He would sometimes pay for a new Rolex — he liked the Day-Date models best — thinking that he wouldn’t be wearing it for long before flogging it to become more liquid. His designer clothes, his BMW M3, they all had to go.

Adam’s health also began to suffer. He was staying up for three or four nights every week to trade overseas. When his trades were going well, he would go out, spending £10,000 on a nightclub table with his mates. When his portfolio took a beating, he would turn off notifications and stay in his flat, glued to his giant screen, looking for a fresh deal. Whether he was on a night out, or working at home, he was using a lot of cocaine. Only now does he recognise what it meant to get hammered, do a few lines of coke and then start trading. “It was like going into a casino completely drunk,” he says.

“The price of cryptocurrency is so unstable that Adam’s portfolio could hit £750,000 but drop to £300,000 in a day…”

Adam took so much cocaine that his Apple Watch started warning him about his soaring heart rate. “I threw it away and never put it back on,” he recalls. Over a three-day coke and trading bender, he could put away six, seven, eight grams by himself. At the beginning of his trading career, Adam would also keep track of his wins and losses in a spreadsheet, but he put an end to that too. “I didn’t want to know how bad it was,” he says.

After one coke binge, he experienced chest pains and couldn’t breathe properly. Thinking he was having a heart attack, Adam checked into A&E. That was a wake-up call. In the end, there was nothing wrong with his body except for the amount of coke he was putting into it. Explaining his lifestyle to the hospital doctors felt like a relief, especially as he wasn’t confiding in his family. “That was the first time I told someone the amount I was doing,” he says. He began to realise that his life had taken a wrong turn.

Adam left the hospital thinking about his drug use. “What’s going to happen next time?” He took stock. His body was “unrecognisable” from the amount of weight he had lost — 16 kilos. “I used to be able to complete the bleep test in school and now I couldn’t even walk,” he remembers, saying that at his lowest ebb he went outside and instantly felt short of breath.

Adam had also cut himself off from his loved ones. He rented his Canary Wharf penthouse because he “wanted to be around money”, he explains. “I wanted to keep my mind in the right zone.” But his proximity to the city’s financial centre also kept him isolated from his family in north London, an extended clan of relatives who were desperately worried about him.

“I missed family birthdays and gatherings because I didn’t want them to see me..."

“I missed family birthdays and gatherings because I didn’t want them to see me,” he says. He ignored his mother’s text messages enquiring after him, and on the rare occasions he would see his family for dinner, he sneaked off to look at the markets.

“I was in so many trading groups, my phone was going off all the time,” Adam tells me. “I’d be out for dinner and be glued to my phone. It was relentless. I would keep leaving every five or ten minutes, saying I had a phone call. I’d sit on the toilet for 15, 20 minutes doing work. People could see the bags under my eyes. You’re not laughing, how can you have fun when you’re losing money? Your face says it all.”

The trading losses precipitated by that one episode of Saturday Night Live, in its way, had a silver lining. “The lifestyle was taking a toll,” he says, referring to the amount of cocaine and alcohol he was ingesting. “If I won I might have died. It’s not good for your body, your mental health. You’re not sleeping for days sometimes.” The money he lost from that one deal is a “sore topic” but in the end the losing streak was necessary to get him out of trading and into therapy. Adam is now back in the family fold, working in the property business, and slowly recovering. “Now looking back on it, I just feel so sad.”

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