TerraLuna Crash Highlights the Next Chapter of our Mental Health Crisis
Crypto has always appealed to me as someone who firmly believes in the idea of breaking down the barriers to wealth creation and opportunity historically afforded only to the wealthy, or accredited investors.
When mainstream news outlets argued for stringent restrictions on crypto, NFTs, and retail investing as a way to protect willing investors from themselves, I laughed — of course the legacy institutions don’t want wealth to be democratized.
I still feel that way, but after the horrific news that has emerged from the Terra Luna / UST crash — with stories of tragic deaths by suicide and token-holders who lost everything — my stance became more nuanced.
Before jumping into it, please consider donating to the Center for the Neuroscience of Psychedelics at Mass General, which has been on the forefront studying possible treatments for mental illness.
Death by suicide is already the 2nd leading cause of death among people aged 15–24. From 2007–2018, the rate of suicide increased nearly 60% among the ages 10–24.
But this spike wasn’t the fault of RobinHood, CoinBase, or OpenSea.
To the degree that this is measurable, experts have attributed the sharp rise to various downstream effects stemming from our increasingly all-consuming digital lifestyle. The clearest example is among teenage girls, who have become addicted to Instagram — deflating self-esteem through a constant barrage of photos detailing the ‘perfect lives’ of influencers.
There’s a million other factors, but like with Instagram and teenage girls, much of it stems from the virtual worlds in which we all live a growing portion of our lives.
As Terra crashed, it wiped out more than just net worth for many — it erased their vision for their own future.
This is the same for retail traders of my generation who have been given the keys to the kingdom as far as investing on margin and operating in a Web3 world that gives them home-field advantage over the older, less tech-savvy generations.
It’s not because of the autonomy.
It’s because of the gamification.
This shouldn’t be news to anyone, but just like social media platforms that devote a depressingly vast amount of capital to study and implement product changes to sink hooks into their users — many of whom become digital addicts at the mercy of their Instagram or Tik Tok feeds — the same is true for the crypto and r/wallstreetbets-type communities.
Our age group is already suffering from deaths of despair, but I worry the next frontier of the crisis lies in the gamification of the stock & crypto world.
Web2 caused the first spike, I worry Web3 could cause the second.
As I am intentionally refraining from highlighting the stories of individuals reported in the press or rumored via Twitter, I’ll speak for myself.
I have watched myself buy into NFT projects, stocks, crypto currencies, and more ‘investments’ feeling little more than FOMO and compulsivity. Thankfully, I am not one of the many people — largely males my age — who had their life savings evaporate. But I don’t have to work very hard to put myself in their shoes.
So many of my peers fall into the target demo for many of these investment platforms. If Instagram incentivizes teenage girls to buy beauty products or follow unhealthy diets to meet unrealistic expectations, young men are incentivized to engage in risky financial activity like options trading and investing in crypto, NFTs, and meme stocks. The mechanism used by these platforms carries many of the same traits of the ‘traditional’ gamified social media platforms, but there are other pernicious elements that convert emotions to dollars.
Like the trap of comparing ourselves to the attractive quasi-celebs on Instragram, we replace influencers with ‘financial experts’ shilling investments by flexing their own gains.
Teenage girls are made to feel ugly, 23-year-old guys are made to feel poor — unless they get in on the action.
And the action is available.
I don’t have any solutions to offer. All I know is the fact that the young men making up such a significant percentage of these high-risk investors are pre-disposed to have a high-risk tolerance, a high risk of dying by suicide, and a desire for status.
This isn’t an argument for putting up the barriers of the past and undoing the strides made in recent years to afford access to these investments to the everyday person.
But it is a plea to reconsider the inherently addictive design in these structures amplifying the negative outcomes for the millions of people who are besieged with triggers form-fitted for their brains to take bigger and bigger risks. While it resembles increased accessibility to a degree, these methods are merely gambling cloaked in the guise of democratization.