Is Trading in Cryptocurrencies a form of Gambling?

A new study has shown that over half of those who replied, feel that trading in cryptocurrencies is a form of gambling. After recent falls in the value of some cryptocurrencies, it’s not the greatest of gambles to participate in.

The study was carried out by Gamban. They are a software company whose work entails blocking the access of devices to apps and online gambling sites. 1,007 Brits were interviewed and 48 per cent felt that stock trading is a form of gambling. That figure rose to 56 per cent when it came to cryptocurrencies.

Anyone who has been dealing in cryptocurrencies was in for a shock last week. The value of all the cryptocurrencies in circulation dropped by a staggering £246 billion.

There has been research in the past that has described excessive trading as a possible gambling disorder. Those who show signs of addictive-like behaviour when trading could also develop gambling problems.

One study into cryptocurrencies was carried out by the Texas Tech University. It found that over 50 per cent of those who gamble regularly had also in the past 12 months traded in cryptocurrencies. This was associated with depression, anxiety and an increased chance of a gambling problem.
The chief executive of Gamban is Jack Symons. He said that the aim of their research is to “help us understand whether different types of trading are considered gambling.” He added that “the lure of immediate gratification through digital platforms is increasingly tempting.” Knowing which steps to take to protect their users from “activities that closely resemble gambling” is therefore very important.

Having this knowledge will allow them to identify which content “beyond the traditional forms of gambling” should be blocked. They can also provide recommendations on how to reduce gambling harm that may take place.

A key job for Gamban is their work with GAMSTOP and GamCare. Gamban provide free software through TalkBanStop.com for those who are having problems with their gambling.

One problem gambling companies have is advertising their products. Cryptocurrencies are no stranger to this problem and have fallen foul of the UK’s Advertising Standards Authority (ASA). They have taken action against Crypto.com with 13 breaches listed. Six of those were for what have been described by the ASA as “misleading advertising.”

One of those was failing to state that there is no regulation of cryptocurrencies in the UK. Just as serious was not saying that the value of cryptocurrencies can go down as well as up. It was felt by the ASA that as the ads were on apps, those seeing them might not be too knowledgeable about cryptocurrencies.

Other breaches by crypto companies included failing to give a mention to how much you can be taxed when making crypto investments. Failure to mention Capital Gains Tax was a common failure.

The advertisement “Buy Bitcoin with credit card instantly” also didn’t go down well. This can see users be given higher interest rates and advance fees as well as see their credit rating affected.

Some advertisements mentioned that investors could earn up to 3.5 or 8.5% pa. However, the type or length of investment that’d make such profits were not disclosed.

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