In the world of cryptocurrencies, the euphoria of the big days has come to an end.

After an exceptional year in 2021, the virtual currency market experienced a dizzying fall in 2022, losing two thirds of its value.

Already facing a major crisis of confidence, the sector is now dealing with the fallout from the FTX scandal.

This exchange platform, a major player in the sector, was forced to file for bankruptcy on November 11, following revelations of fraudulent transactions, affecting several hundred thousand creditors around the world. 

On November 10, 2021, bitcoin broke an all-time high of close to $69,000.

A year later, the leader in cryptocurrencies has just fallen below the 16,000 dollar mark at the end of a dark year.

The global market, estimated at $3 trillion, is now worth less than $900 billion, according to experts. 

"This period of strong growth, called 'bull run', followed by a significant drop, the 'bear market', is a classic of finance that we have already experienced several times in the crypto market" underlines Cédric Tampestini, investor and French youtubeur.

“But it is true that the magnitude of the decline in 2022 surprised investors in the sector: no one thought that Bitcoin could go back below $20,000”. 

A year and a half ago, Romain, a young 20-year-old student who is a fan of trading, decided to go "all the way" in crypto, attracted by the strong returns in the sector.

Although he explains that he limited the damage by selling his assets at the start of the bearish period, he readily admits that the gloomy context weighs heavily on his morale. 

"I work hard to make a place for myself in this environment and make a living from it. I invest, I train and I also write for specialized publications. It's a lot of work. The problem is that the 'bear' has an impact on the whole ecosystem: it is harder to make money and the general interest in crypto decreases It is not a sudden crash but a slow and painful period during which it is difficult to hold on the bar. In such a context, people who are a little feverish break down, sell at rock bottom and lose a lot of money".   

While the most staunch crypto followers continue to invest, believing the rebound is coming soon, others are now openly displaying their dismay on social media.

At the same time, recent studies warn of the potential psychological dangers associated with this activity, an intense stress factor, which can lead to depression.  

Addictive risk

In recent months, several teams of researchers have been interested in the psychological impacts linked to the use of virtual currencies.

The study from the University of Queensland, Australia, finds "strong similarities" between the behaviors of some crypto traders and compulsive gamblers, who develop a form of addiction that can lead to ruin and severe depression . 

“Cryptocurrency is of course not the only area in which users are exposed to this type of psychological risk, but it is particularly fertile ground” analyzes Nathalie Janson, professor of economics, specialist in the sector.

"Some virtual currencies such as bitcoin are in limited supply in the market. The volatility is therefore particularly high because it is not possible to adjust production according to demand. At the same time, crypto generates new economic models whose solidity is difficult to verify, as we have seen again recently with the sudden bankruptcy of FTX". 

The management of emotions

Over the past few months, the crypto crisis has exposed weaknesses in the sector, leading to a series of bankruptcies.

The French investor Cédric Tampestini admits having had a big heat stroke during the FTX affair.

"I had invested 100,000 euros there believing that it was a solid player. Fortunately, I managed to withdraw my marbles a few hours before the blocking of withdrawals". 

To resist stress, the entrepreneur explains that he has had recourse for several years to the accompaniment of a coach, who helps him to understand his own psychology and to manage his emotions. 

In France, several firms have specialized in this field, such as Emelior, based in Aix en Provence.

"We do not provide financial advice, but work on behavior to avoid risky practices," explains Cécile Cubadda.

The founder of the company, herself an investor in crypto, cites as an example the "FOMO" syndrome, (acronym for "Fear of missing out" in English), which characterizes the anxiety of missing the right opportunity, the " Revenge trading", which pushes you to invest more and more to ward off the feeling of defeat, or even "dirty panic", when intense stress prevents you from acting. 

"If you lose the rational aspect in the crypto business, you might as well go play in the casino. This is why the control of emotions is absolutely essential in our field", she underlines. 

Although he has never consulted a coach, Romain, the young investor, also shares this approach.

"As prices are low, I have recently started investing again. But I have set myself an investment plan in advance to avoid impulsive decisions and I only invest money that I can afford to lose" , he says.

While prices continue to fall, Romain avoids following the evolution of the market too closely to protect himself.

He is betting on longer-term gains, well aware despite everything that the statistics are against him.

Because in this kind of market, "for a few to win, many have to lose".  

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