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How To Control Depression And Stress In A Cryptocurrency Winter

As of now, keeping cryptocurrencies the only source of income is generally ill advised. Some question about it, so the reason is because of crypto winters and its effect on mental health. There can be many other ways to earn a living instead of just focusing on one thing. Because of the internet and the age of information, sources of income have become diverse and can be sought after quite easily.

Especially since the COVID-19 pandemic, people have managed to find unique ways of earning from the comfort of their homes, without having to worry about the issues of dedicated workspaces. While cryptocurrencies are one of those sources, when people post about their success in cryptocurrency trading, it develops jealousy and urges others to follow the same path, pushing them towards investing and earning from the cryptocurrency space.

This is the same case with other source of income as well, since people are attracted towards money, to not only survive, but also fulfill their materialistic needs. Due to the ongoing market volatility for cryptocurrency assets, people must constantly analyze and watch the market to better manage their assets and make sure they are not losing on their investment.

This kind of fear brings an assortment of mental health issues such as sleep deprivation, fatigue, developing anxiety, depression levels and addiction.

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This article will now explain about crypto winters, crypto additions, ways to control addiction and how to handle emotions and stress in the occurrence of a crypto winter.

Understanding crypto winter

A crypto winter is generally referred as the situation of a cryptocurrency market experiencing bad performance levels. This type of situation is very similar to a crypto bear market, however there some differences between the two which will be discussed later in the article. A crypto winter is usually seen as a negative event that leads to several cryptocurrency assets experiencing a significant loss in price.

According to research, these crypto winter events are seen to stimulate mental health issues within investors, who are looking to make a living out of it and are sort of dependent on their cryptocurrency investment. Analyzing the history of the cryptocurrency market, crypto winters can often be easily highlighted, as crypto asset price valuations drop by double digit numbers.

Looking back, crypto winters have happened quite many times. Taking the example of the market situation from the year 2017 till 2020, the asset valuations had dropped quite significantly from their average prices, but after that the market suddenly changed and the prices skyrocketed to reach new record highs, leading to the development of a crypto bear market. 

But because of the volatility of the cryptocurrency market, it is very difficult to predict price changes in the coming times, so investors should be cautious around them. More on this explained later.

Issues with crypto winters

Looking at the overall stock market, it has had quite a long history behind it, showing many ups and downs, however with cryptocurrencies, the situation is different. The cryptocurrency market is still considered to be a developing one and in comparison, to the stock market, the crypto market does not even come near in terms of history.

The issue here is that because of the cryptocurrency market still in the development life, there is not telling about the duration of a crypto winter. Looking at the worst-case scenario, a crypto winter could either last for a couple of years or could even last till the price valuations of some assets drop to nearly zero, plus there is a chance that the price valuation of certain assets might not be able to recover back, which will then lead to investors losing their money and falling prey to mental issues.

Another issue is regulatory measures. Both cryptocurrencies and cryptocurrency exchanges are still currently not subject to any formally devised regulations. Despite some crypto business becoming the subject of regulations, majority of the companies are operating with freedom.

Without proper regulations, fraudulent activities and scams are developed without any control, so users need to be more vigilant when trying to approach companies and invest in cryptocurrencies, as there is no telling about their true intentions. Due to this, many people in the financial space think that cryptocurrencies should be illegal, as they have no value and are used for criminal activities such as money laundering, frauds and scams. 

Difference between crypto winter and bear market

Bear markets are said to be certain time frames that bring the devaluation of stocks, which is a result of different economic reasons. As mentioned before, bear markets are very similar to crypto winters, however they are not fully related to each other.

The price valuation of stocks is mostly decided by different bodies in control of the market, so investors utilize different technical strategies to figure out the prices they seek. In the case of cryptocurrencies, models based on price valuations are quite underdeveloped, to this highlights a major difference between stocks and cryptocurrency assets.

Differences aside, as experienced in the year of 2021, both the stock market and the cryptocurrency markets experienced major losses because of a crypto winter, so there is a possibility that both bear markets and crypto winters can occur together in time.

A crypto winter might lead to majority of the assets to experience a price drop, however it is possible that some assets are minimally affected, but investors should always prepare for the worst, as there is not telling which crypto could drop.

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Predicting a crypto winter

In general, accurately predicting a crypto winter’s start or end is not seen as a true possibility. Although some hints of a crypto winter can be determined by keeping tack of news, community trends and social media platforms like Twitter and Reddit, which can help investors keep a sharp eye and manage their investments accordingly. However, it is still important to keep in mind that crypto winters can occur at any time and there is not telling how long they will likely last.   

Crypto addiction

Now that we have effectively understood what crypto winters are, it is now time to learn about crypto addition and its effect on mental health.

Crypto addition is basically an obsession that is developed with the trading of cryptocurrencies and efforts to make money out of it. When constantly watching over and trading cryptocurrencies gains more priority than your sleep, your health and even your wealth, these are signs that you are addicted to cryptocurrencies.

It also involves losing the realization of taking a break and having the constant feeling of analyzing the market and news surrounding the cryptocurrency space, all for the efforts to gain advantage in trade over others. 

The important thing to keep in mind is that cryptocurrencies and other materialistic things are not seen to be called as addictions, however when a human is constantly engaged with them regardless of other significant things, then that act is said to be called as an addiction. Thing that that makes one addictive is the open availability of tracking real-time statistics of assets and holdings, while also being stimulated by attractive content that is posted almost daily.

Examples include, cryptocurrency exchange smartphone apps, YouTube videos and many others.

A cryptocurrency addiction is also identified if you spend most of your time constantly glued towards learning cryptocurrencies and their respective market trends. More signs of acute crypto addiction include overconfident ways to stop trading without following any proper strategy, stimulating risks and failure to focus on people during social interactions, always glued to the screen watching market trends.

Moreover, experiencing stress, anxiety, depression, unstable mood and other mental illnesses being developed through cryptocurrency trading signifies that a person is abnormally involved into the crypto space and has a vague clue of his surroundings.

Tackling crypto addiction

While crypto addition might become a major issue in your life, there are several ways of mitigating that addiction, which can not only help your social life, but can Improve your mental health in astounding ways.

The first way of tackling cryptocurrency addition is to completely remove yourself from the space, by deleting any cryptocurrency applications and unfollowing any crypto related news or content sources. While cryptocurrencies can be beneficial, it is generally advised to invest less into it and not considering it as your main source of income.

There are many other types of skills, such as writing and programming that can also become a source of income in not only the crypto space, but other major industries as well. But if you’re passionately interested in the world of cryptocurrencies, then learning different kills can land you a career that suits you.

For example, if the newly emerging metaverse interests you, then you can spend a portion of your daily time to learn knowledge and gain skills. The metaverse hosts several different fields like artificial intelligence (AI), virtual reality (VR), augmented reality (AR), digital world design and many others, which can provide a detour from the addiction of trading.

Another way of reducing addiction is taking a massive break and going on vacations and events. This will not only help you gain a better relationship with your friends, family and individuals, but will also help you meet new people, who can bring a positive change in your life. Furthermore, share your issues and concerns with others and talk to the people you trust about your life. This will help you develop a great level of understanding and assist you in your healing towards addiction.

Mental effect of loss in the crypto space

Different cryptocurrency traders can have different types of attitudes. The experienced ones can take the beating of a loss; however, the inexperienced ones sometimes are not able to cope with the loss, which can only increase their urge to go for more, but can surely develop mental health issues like stress, and depression.

Despite having a good knowledge and skills on cryptocurrencies, inexperienced traders become a victim of their immature emotions in the case of a loss. This leads to even worse performance ahead, which triggers more losses. This phenomenon is called loss aversion, which indicates that the effect of losing an asset severely overcomes the effort of initially trying to pursue it. 

Additionally, the repercussions due to massive loss in crypto can also outweigh the perceptions that are based on the outcomes of minimal gains or losses. In general, minimal levels of loss can be recovered by implementing temporary alternatives in consumption rates or by putting in more time towards work, but in the case of high-level losses, the recovery is only possible if the market manages to provide significant returns, which can sometimes take even years of time to accomplish.

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So, due to the massive losses not being able to be recovered by a trader, eventually leads to stress, anxiety and a variety of other mental health related problems.

To better understand this, we can take the example of the LUNA cryptocurrency. The LUNA currency was sitting at the list of most popular currencies, but one day, all hell broke loose. The LUNA currency suddenly crashed with a percentage decline of more than 98% in just one day of time, igniting chaos on its investors, because of their investment losing such massive amounts of value, with them not aware of looking at what they were going into.

As the clocks continue to click, such type of events will continue to happen, leading to significant amounts of loss in those who invested hard, and leaving them with having to suffer with mental health problems.

Handling emotions in the crypto space

Making decisions based on emotions leads to decisions that do not go in parallel with logical sense. But cryptocurrency trading becomes something that can be enjoyed and be thrilled with since the human brain acts in deferent ways.

Decisions that make sense on the emotional levels but are not in line with logic are mostly said to be triggered by two certain behavioral factors that include fear of missing out (FOMO) and fear, uncertainty, doubt (FUD), thereby increasing the chances of making nonsensible decisions. So, because of this, having a strong grip over your emotions is important to eliminate unwanted risks and dodge loss of investment.

A vital step in reducing impact of emotions is to eliminate the consideration of emotions when trying to buy or sell cryptocurrencies that assist you in your strategy to earn big. Having a clear understanding like being thoughtful of the volatility surrounding the crypto market and the risks that come with digital currency investments is crucial and if these aspects are not understood, then it is advised to stay away from cryptocurrency trading, because it can lead to losses.

Instead of relying on the opinions of others, it is best to understand and learn about the cryptocurrencies you are interested in, so that you can make better and effective decisions surrounding them. Success is of course not a guarantee; however, the chances of success can drastically increase if you have the proper knowledge and skills to work with the cryptocurrencies.  

Another way of removing emotions from trading decisions is to seek out a trading platform that can assist you making the right decisions and provide you with different ways of achieving your desires. Furthermore, it is important that you keep a check on how much you are investing. The best way is to only invest the wealth which you think can have minimal effect on your overall valuation, removing a greater level of risk.

Now that a certain decision has been made with a clear mindset, it is vital to stay within the limits of that decision and one should not spend that he cannot handle out of emotional factors like FOMO or FUD.

Bringing up the strategy of utilizing services of a platform, try to seek a platform that has the feature of setting limits on orders. With this, in the case of a certain asset dropping in value, the limit order feature activated can protect you from financial loss and can also assist you in locking up gains. Using the order limit feature, you will allow yourself to select the cheapest price at which you want to trade your digital assets.

Concluding Notes

Crypto winters are a regular part of the cryptocurrency ecosystem and can occur at any time, while also staying for uncertain amounts of time. So, it is important to seek knowledge and understand how to deal with times like this and stabilize not only your assets, but also your physical and mental health. Mental health issues like anxiety and depression can be the result of cryptocurrency trading addiction, so one should not let addiction have the greater level of influence over oneself.

Trading of cryptocurrencies should also be void of any emotions, as they can lead to unwanted situations and losses that can hurt bad in the long term. There are many ways of tackling crypto addiction and removing emotions when making financial decisions. Both are harmful and will not provide you with the success you desire in the world of cryptocurrencies.   


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Mubashar Nawaz (United Arab Emirates)

Mubashar Nawaz is an experienced crypto writer working for Tokenhell. Having passion for writing, he covers news articles from blockchain to cryptocurrency.

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