Crypto winter can take a toll on hodlers’ mental health

With so many struggling to maintain emotional well-being during this crypto winter, self-improvement and mental health experts can help navigate the ups, downs and soul-shattering experiences that a long-term bear market can bring.

Mental health professional Elizabeth Sterbenz and wellness thought leader Srikumar Rao discuss with Magazine how to cope with the depreciation of crypto portfolios, move forward and illuminate intuitive happiness. Sterbenz is a licensed psychotherapist in California specializing in individual, couples and financial therapy. Rao is an international speaker and executive business coach with a PhD from Columbia University. He teaches a course at the Kellogg School of Management at Northwestern University that merges Eastern philosophies with modern business practices.

Learn how to ride a tsunami

Rao believes that crypto traders, developers and community members have been hit by a tsunami. They are struggling through a long-term crypto winter that shows no immediate signs of warming. They also celebrated a two-year NFT boom that was quickly followed by a devastating bust.

The community was recently gobsmacked when major figures in the cryptocurrency industry, like Sam Bankman-Fried and Do Kwon, were accused of fraudulent activities, discrediting the industry and harming investors. 

And the hits keep coming. Just weeks ago, the United States Department of Justice and other international authorities took down a Hong Kong-based crypto exchange and arrested its founder in Miami. 

Rao believes that the bear market can be used as an opportunity to learn how to surf the top of the tsunami while calmly observing what’s happening below. He says one can achieve this by accepting that winning is not a requirement for happiness. Happiness doesn’t come from making the right trade or a lot of money. According to Rao, that’s a false belief:

“The thought that you have to have something happen in order to be happy, it’s just false. But you believe in it so strongly because you never really thought about it independently. You’ve just been carried on by the mass hysteria.” 

Sterbenz takes it a step further, suggesting it’s unnecessary to go it alone, especially in these tough times. “I think you have to be able to kind of trust, you know, having a good financial adviser. That’s an important part of your team.”

She believes getting sound, objective financial advice will provide peace of mind. Relying on someone else to help assess trades and to help make decisions about overall financial situations provides a feeling of being covered. “You can then set your financial worries aside and focus on your well-being,” Sterbenz says. 

Rao claims it’s also important to recognize that cryptocurrency has no intrinsic value. The value is only what people believe it is. Large numbers of people agree that a particular token has a particular value at a particular time, but the moment people don’t feel that way anymore, the coin ceases to have the same value.

Rao says, “If you accept that up front, before you make the investment, and you say that what could have happened did happen, and it happened when I made the wrong trade, that’s okay. I’ll recover. I’ll move on, and I never really needed this to work out to be happy in the first place.”

How to deal with the crypto corruption shakeout

Many of the crypto community’s worst fears were realized when FTX imploded and its founder was arrested, as well as when Terra crashed and subsequent charges were filed against its former CEO. Uncertainty about the inevitability of stricter federal regulatory efforts further validated those concerns.

Crime is now, undeniably, a part of the crypto ecosystem, just as it is part of the traditional investment arena. That’s a tough pill to swallow, and even meaningful regulatory crackdowns are cause for concern.

Nonetheless, Sterbenz suggests that this is nothing to be ashamed of and doesn’t mean participating in crypto is disreputable or embarrassing. Comparing the situation to those critical of traditional investors after history’s largest Ponzi scheme was exposed, Sterbenz says, “That’s also like saying, like Bernie Madoff, ‘I told you all these stocks were a scam. You should be putting your money in the mattress.’”

According to Sterbenz, it’s important to separate from the bad behavior of unscrupulous characters and simply accept that there will always be bad actors.

Rao believes blaming lousy luck or crypto losses on those bad actors certainly won’t lead to happiness or peace of mind. He says that when the universe, or its participants, doesn’t play by the rules and things go the opposite way, it’s easy to assume the sky is falling. Distress and unhappiness can quickly follow. 

“And you blame it all on an outside force. I am unhappy because so and so did such, and he’s a downright scallywag. And because he’s a scallywag, he’s now being investigated. But, in the meantime, the markets are gone to hell!” Rao says. Instead, he suggests anchoring yourself in the idea that you’re only involved in crypto because that’s where your path is taking you. “Me playing this game is something I do because it’s my path in life, and I’ll enjoy playing the game. I don’t necessarily have to win for it to bring me satisfaction or joy,” Rao says.

That’s great, but I’m rekt!

According to Rao, traders who have lost it all must accept that they believed something, perhaps all of their lives, that turned out to be disastrously untrue. Happiness cannot be found in a successful trade any more than it can be lost by a bad one.

Rao says, “The thing to do is not beat myself up and shoot second arrows at myself. Simply recognize that this was wrong. It was a sharp cut with a knife, but now that I have received it, I can see how clearly I was wrong. Let me pick up the pieces and not make that same mistake again. Tomorrow is another day, and I don’t have to let today’s residue poison tomorrow.” 

Although it’s not easy, Rao suggests looking at awareness like it’s a flashlight. A flashlight illuminates whatever it shines its light on. “If you illuminate it on the big gains you once had and neglected to sell, and now it’s all gone, and you’re behind where you started, you’re shining the flashlight of your awareness on something that you defined as wrong in your life,” Rao says. That’s an inefficient strategy. Instead, he suggests shining the flashlight on what to do next. “You’re not starving, you’re not being foreclosed and thrown out of the house — or even if you are, nobody’s holding your hands in a vice while they rip your fingernails off,” Rao says.

For those really struggling with severe anxiety or depression, Sterbenz recommends therapy and believes that professional help can be a gateway to personal growth. If one is not experiencing a severe clinical need and therapy isn’t necessary, she suggests focusing on the concept of radical acceptance. 

According to the Berkeley Well-Being Institute, radical acceptance is “accepting what is not under your control and embracing what is happening now in a non-judgmental way.” Radically accepting emotional or physical pain can reduce the suffering they cause. “If you were involved in any of the cryptocurrencies that have been affected by this, you can move forward from there. Other people have also been affected by this. You made the best decision you could at the time,” Sterbenz says. 

Reach out for help 

If crypto traders or holders are experiencing thoughts of self-harm, Sterbenz says, “Get help immediately.” She suggests going directly to a medical professional or calling a trusted friend.

The crypto community has previously shared resources such as international aggregators of suicide hotlines during bear markets when a number of hodlers who were underwater expressed harmful thoughts.

Regarding such thoughts, Sterbenz says, “They do pass. It does not feel like that when you’re in that moment. It does not feel like those two to five minutes are going to end.” Therefore, she believes it’s most important to have people around you who will do the best for you.

Sterbenz also believes that family and friends shouldn’t hesitate to reach out to loved ones who might be considering self-harm. She says that many people think talking about suicide makes it more likely something will happen. “And that is really not true,” Sterbenz says. She recommends directly asking those struggling if they are thinking of hurting themselves. “That’s not gonna make them more likely to do something.”

Lady of Crypto, a trader and Twitter influencer, also advocates for mental health. She tells Magazine, “It was an incredibly tough time in the crypto space, and so many people were affected. I’ve had friends who have struggled, and I’ve seen how people can become shadows of themselves and be pushed to the edge. To see these messages on Twitter really is heartbreaking. No one should ever be in a position where suicide is their only option. I just thought if I kept my inbox open and could make a difference to even one person, it would be worthwhile.”

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So, where’s the happiness after all?

According to Rao, one can’t look for happiness. It can’t be discovered in a favorite altcoin, and it won’t suddenly appear when Bitcoin finally breaks $100,000. Rao believes that happiness is not something to be sought after. The more one seeks happiness, the more it runs away. Happiness just happens. It’s not an aspirational goal but springs out organically in adopting a certain mindset.

“The mindset you’re gonna occupy as a crushed crypto trader is: Okay, I’ve blown a big chunk of my fortune and net worth away. It’s very unfortunate, but that’s the way the universe went. And I can now cry myself to sleep every night and make matters a whole lot worse, or I can shine the flashlight of my awareness on the fact that I’m still healthy. I’m still whole. I’ve learned a very expensive lesson,” Rao says.

Focus on what to do next. Even if yesterday’s red candles insistently keep trying to grab one’s attention, Rao suggests recognizing this as mental chatter. Instead, focus only on what to do going forward.

Mitch Eiven

Mitch is a writer who covers cryptocurrency, politics, the intersection between the two and a handful of other, unrelated topics. He believes that crypto is the future of finance and feels privileged that he has opportunities to report on it.