Trigger warning: The following content contains references to suicide
A number of suicides have been reported recently owing to cryptocurrency losses, pointing towards the long-standing connection between financial woes and mental health.
Globally, one person dies by suicide every 40 seconds, according to the World Health Statistics. This results in about 800,000 deaths due to suicide every year. In fact, suicide is the second leading cause of death in the world for those aged between 15 and 24 years, after accidents.
Most suicides are a culmination of a number of factors including mental health, and lately, a number of suicides have been reported due to cryptocurrency losses.
In China last year, a couple attempted suicide after the husband sustained losses to the tune of US$3 million on his bitcoin investment. Of this, $500,000 belonged to the wife’s parents, The Business Standard reported. The husband ended up stabbing and killing his daughter, before the couple jumped from a bridge. The husband was rescued and tried in court for the deaths of his wife and daughter.
Similarly, a bitcoin trader from India killed his wife and two children before dying by suicide in October last year, due to massive losses and mounting debt from bitcoin investments, Times Now News reported.
More recently, an individual from Turkey killed his two children and wife before dying by suicide due to losses from bitcoin investments in March this year. Just a month later, a temporary public sector bank employee in India consumed rat poison and died after losing over $13,600 in bitcoin investments due to a ‘technical lapse,’ the New Indian Express reported.
The same month, an investor from South Korea also died by suicide after suffering losses of over $180,000 in an investment in unnamed crypto assets, according to a Crypto News report.
These are just some of the examples of cryptocurrency-related suicides reported recently. Several news reports have noted that people are contemplating suicide due to crypto-related losses amid the latest crypto crash. Tumultuous regulatory changes in countries like China, India, and Turkey, has only added to the problem.
Financial distress and crypto-related suicides
This is not the first time crypto-related suicides are gaining headlines. In 2018, a similar increase in crypto-related suicides was noticed after the cryptocurrency market crashed in August.
While the entire crypto community was reeling from the crash, the situation was particularly critical in Korea as crypto traders were on “suicide watch,” The Sun reported. A cryptocurrency forum on Reddit even started providing suicide prevention support to affected investors.
Financial distress has become a common reason for suicide. Losses arising out of bad investments, regardless of whether they are related to cryptocurrency or not, are difficult to cope with.
Researchers, while analyzing investors who suffered losses in the 2008 market crash, have found that a sudden large loss in wealth can affect mental health. The study also found that the impact on mental health is greater among people with high levels of stock holdings prior to the crash. This means that the greater their loss, the more acutely their mental health was affected.
Cryptocurrencies have emerged as a popular investment asset, especially among the younger generation. While they have always been volatile, crypto prices have reached record breaking highs and lows over the past 12 months. These bull and bear runs have created immense opportunities for amassing wealth, but at the same time, have caused unbearable losses leading to suicides.
This higher volatility is often appealing to those looking to make quick bucks, but it also makes cryptocurrencies a riskier investment option than the traditional stock market.
At present, the number of reported crypto-related suicides is too small to show statistically significance of crypto-related suicides as a trend. Yet, it points towards the problem of financial distress, and how volatility in the crypto market further compounds the issue.
At the end of the day, investors need to account for all the risks of an investment, evaluate how much risk they can take without overexposure, and realize when to pull out of an investment, in order to be successful at trading any asset.
But most importantly, they must understand the basic mechanisms of cryptocurrencies and how they work in order to successfully earn money from them. Losses are an inherent part of trading, and worst-case scenarios should always be anticipated.
Header image by Fernando @cferdo on Unsplash