Cryptocurrency users with a gambling affinity are more involved mentally and financially than non-gambling users
Cryptocurrency users who also gamble tend to be more mentally involved compared to their non-gambling counterparts, according to new research published in Computers in human behavior. The new study provides insight into some of the psychological patterns that characterize heavy cryptocurrency users.
Cryptocurrency is a digital asset designed to act as a medium of exchange that uses strong cryptography to secure financial transactions, control the creation of additional entities, and verify the transfer of assets. Bitcoin, the first and most famous cryptocurrency, was created in 2009. Since then, cryptocurrencies have become increasingly popular. But prices can fluctuate quickly and investing in cryptocurrencies involves significant risk.
The risk-taking aspect of cryptocurrencies has led researchers to investigate the potential link between cryptocurrency trading and problem aging. Study author Fred Steinmetz noted that trust in cryptocurrency and ideological motivation can play a significant role in the use of cryptocurrency. Furthermore, little is known about cryptocurrency users who also gamble
“Since the beginning of my research journey in 2015, my research topics have included blockchain technology, cryptocurrency and gambling. It was only logical for me to start investigating the intersections of these topics,” said study author Fred Steinmetz, co-founder of the non-profit Blockchain Research Lab and author of “Blockchain and the Digital Economy: The Socio-Economic Impact of Blockchain Technology.”
For his study, Steinmetz analyzed a representative sample of 3,864 Germans regarding their use of cryptocurrency and involvement in gambling in the past year. The data was collected in 2019.
The participants were categorized into four separate groups: there were 1,844 non-users (who neither gambled nor ever used cryptocurrency), there were 1,312 gamblers (who had recently gambled but never owned cryptocurrency), it was 708 crypto users (who at one point owned cryptocurrency but hadn’t gambled recently) and it was 435 crypto gamblers (who at one point owned cryptocurrency and had also gambled recently).
Crypto gamblers reported having significantly higher levels of knowledge about blockchain technology along with higher levels of trust in cryptocurrency. Crypto gamblers were also much more likely, compared to regular crypto users, to consider their ownership of cryptocurrency to be ideologically motivated.
“Cryptocurrency is not only about trading alternative financial assets. In differentiation to, for example, stock trading, cryptocurrency users experience a different mental engagement, which is related to the narratives and ideologies that permeate the industry, Steinmetz told PsyPost. “Cryptocurrency users with a gambling affinity are more involved mentally, proactively and financially than non-gambling users.”
Additionally, crypto gamblers tended to be younger, more likely to be male, better educated, and better off financially than non-gambling crypto users. “The profiles of crypto gamblers are similar to those of skill gamblers and stock traders, but differ in terms of their average young age,” Steinmetz wrote in his study.
The crypto gamblers were further divided into three different clusters. One cluster consisted of those with high ideological motivation and trust in cryptocurrency and a moderate level of financial investment who used their cryptocurrency for the purpose of speculating relatively infrequently. The second cluster had high ideological motivation and trust, a high level of investment and was often engaged in cryptocurrency speculation. The third cluster consisted of crypto gamblers with low ideological motivation and trust, low levels of investment, and low levels of cryptocurrency speculation.
“Among crypto users who also gamble, I identified a group consisting of heavy users who are highly engaged and potentially considering cryptocurrency and gambling substitutes,” Steinmetz told PsyPost. “The correlation between the examined variables suggests that high levels of mental involvement among crypto users who also gamble induce higher engagement in terms of owning more cryptocurrencies and speculating more often.”
The second cluster of heavy users accounted for a significant proportion of crypto gamblers. “A ~35% share of heavy users among all cryptocurrency users who also gamble was not expected. This warrants further research in the domain,” said Steinmetz.
“The results suggest that instead of focusing exclusively on cryptocurrency trading frequencies, researchers should broaden their scope by acknowledging the importance of mental involvement of cryptocurrency users, such as trust perceptions, proclaimed knowledge of cryptocurrency, and ideological motivation,” the researcher said.
The study, “The interrelations of cryptocurrency and gambling: Results from a representative survey”, was published online on 22 August 2022.
