People are experiencing harm from investing in cryptocurrencies and other high-risk trading products, experiencing similar difficulties that people report with gambling harms, according to new research from YouGov.
Our National Gambling Helpline received almost 200 calls in the past two years from people who have disclosed that they struggled with online financial markets, including cryptocurrencies.
This includes accounts of people losing over £50,000 through their trading, and young adults who spent mortgage deposits on cryptocurrency but ultimately lost large amounts of money to it.
A recent YouGov survey of over 4,200 UK adults, commissioned by us, reveals that investors of cryptocurrency are more likely to report they have lost money on their investments (40%) than gained money (34%).
It also found that those gambling at harmful levels* were almost five times more likely to own cryptocurrency than the general population (51% vs 11%), while also being more likely to experience more negative impacts as a result of cryptocurrency trading.
Raminta Diliso, Financial Harm Manager:
“For many consumers, cryptocurrency purchases are a way to diversify their investment portfolio. However, what we have seen on the National Gambling Helpline over the past few years is that serious harm can occur if it goes too far and it’s not always the get-rich-quick opportunity some people may think it is.
“The volatility and unpredictability of these currencies can sometimes create a similar environment to gambling, where people are starting to chase the rush rather than feel they are engaging in a financial activity.”
Harriett Baldwin MP, Chair of the Treasury Committee:
“The Treasury Committee recently took a close look at the state of the cryptoasset market.
“The sharp peaks and drops in the value of cryptocurrencies clearly demonstrates the risks speculating on them can pose to consumers.
“Trading of cryptocurrencies, like Bitcoin, is equivalent to gambling. By betting on these unbacked ‘tokens’, consumers should be aware that all their money could be lost.”
FAQs
It also found that those gambling at harmful levels* were almost five times more likely to own cryptocurrency than the general population (51% vs 11%), while also being more likely to experience more negative impacts as a result of cryptocurrency trading.
Is crypto trading a form of gambling? ›
Buying cryptocurrency can be both an investment and a form of speculation or gambling, depending on how you approach it. When you invest in cryptocurrencies with a long-term strategy, based on research, analysis, and understanding of the technology and market trends, it's considered an investment.
What are the risks of crypto gambling? ›
Security concerns: crypto gambling platforms may be targeted by hackers and cybercriminals seeking to steal funds or personal information from users. Without proper security measures in place, users risk losing their funds or falling victim to identity theft or other cyberattacks.
Why do people gamble with crypto? ›
One of the main advantages of gambling with Bitcoin lies in its ability to cut down on transaction costs. Traditional online betting sites often involve high fees for deposits and withdrawals. These can eat into a player's winnings or add to their losses. Banks, credit cards, and e-wallets typically charge these fees.
What is crypto addiction? ›
Crypto addiction is characterized by excessive time and resources spent on online trading despite experiencing adverse consequences in many areas of life.
What crypto is used for gambling? ›
Global Access: Bitcoin is a global currency, allowing users from different countries to participate in gambling without worrying about currency exchange rates or international transfer issues.
How much of a gamble is Bitcoin? ›
In line with these findings, the United Kingdom's Financial Conduct Authority (FCA; FCA, 2019) reported that, based on a survey of 2132 British respondents, the purchase of cryptocurrency is most often intended as a gamble (31%), as portfolio diversification (30%), or in the expectation of quick gains (18%).
What is the biggest risk in crypto? ›
Cryptocurrency Risks
- Cryptocurrency payments do not come with legal protections. Credit cards and debit cards have legal protections if something goes wrong. ...
- Cryptocurrency payments typically are not reversible. ...
- Some information about your transactions will likely be public.
The price volatility, alleged use in criminal activities that may not be easy to map, and high energy consumption for mining the coins are considered some of the key challenges to accepting cryptocurrencies, aside from the fact that these coins do not have any sovereign guarantee or approval.
Do you have to pay taxes on gambling crypto? ›
Converting cryptocurrency to USD within a casino platform is a taxable event, often resulting in capital gains or losses. Deducting crypto gambling losses depends on local tax laws, but can often offset only gambling winnings and not other income types.
While there is no blanket federal law against gambling with Bitcoin in the US, the UIGEA and other statutes make it illegal for companies to knowingly accept crypto payments for unlawful internet gambling. State laws vary widely, with some banning online gambling altogether and others regulating it.
Is gambling a sin? ›
The Bible never specifically forbids gambling. But it is usually considered a sin because it is associated with greed.
What qualifies as gambling? ›
Gambling is when a person bets or risks something of value (like money) based on a chance outcome that is out of their control or influence with the understanding that they will either gain increased value or lose their original value determined by the specific outcome.
How to get rid of crypto? ›
How to cash out your crypto or Bitcoin
- Use an exchange to sell crypto.
- Use your broker to sell crypto.
- Go with a peer-to-peer trade.
- Cash out at a Bitcoin ATM.
- Trade one crypto for another and then cash out.
Cryptocurrency addiction can result in various life problems including but not limited to: Mental health issues such as anxiety, depression, irritability, and increased stress as well as suicidal thoughts related to feelings of shame or hopelessness surrounding finances.
Why is everyone obsessed with crypto? ›
Cryptocurrency is a digital asset designed to be an investment with the possibility of also being used as a medium of exchange. Being a visionary and hearing success stories make cryptocurrency appealing to certain personalities. People who invest in crypto often experience an obsession with checking their coins.
Is trading technically gambling? ›
While trading is not gambling, one could consider a trader taking a gamble. If executing trades in a purely speculative way, lacking any planning, analysis, learning, or research. This is not to say that trading forex for instance isn't speculative, it is. But the speculation is based on engaging in analysis.
Is digital trading gambling? ›
“No, not really… trading is nothing like gambling if you know what you're doing”.
Does trading crypto count as income? ›
The IRS treats cryptocurrencies as property for tax purposes, which means: You pay taxes on cryptocurrency if you sell or use your crypto in a transaction, and it is worth more than it was when you purchased it. This is because you trigger capital gains or losses if its market value has changed.
Can you legally gamble with crypto? ›
First and foremost, cryptocurrencies in general are perfectly legal in the US. Gambling laws, however, are determined on a state-by-state basis. According to CBS Sports, online sports betting is legal in over 30 US states. Casino games, however, are viewed differently by each state.
