Jan Gerber, Paracelsus Recovery CEO, joins Yahoo Finance Live to discuss the signs of crypto addiction, why it's becoming more prevalent, and recovery programs.
AKIKO FUJITA: Well, crypto's popularity has certainly skyrocketed in the last several years, but now a growing number of mental health professionals are likening cryptocurrency investing to gambling and the risks associated with such addictions. One Swiss clinic is offering a recovery program for crypto addicts at a very steep price. Joining me now is the CEO of Paracelsus Recovery, John Gerber. Jan, my first question is, how do you diagnose crypto addiction? What does that look like?
JAN GERBER: Hi, Akiko. Um, well, it's like diagnosing any addiction. It's, uh, normally when there are signs, it's already late in the process. There can be various signs, but, uh, when people around the individual who might be addicted, uh, realize that, you know, some developments are going into a bad direction.
That person might spend way too much time trading, might have, uh, apps on the phone open all the time, um, might get up at night to check the portfolio, really where it takes over private life, where it creates a stress, where it has an impact on relationships. That's normally kind of the first time is when-- normally not the person of concern, but the people around say something's not going in the right direction.
AKIKO FUJITA: It's worth noting that, um, you know, you've said you-- you specifically address the ultra-high net worth. We're showing on the screen here your program is $90,000 a week. What have you heard from clients who've been coming in? I mean, it sounds like you've gotten a surge of calls from the ultra rich, who, for one reason or another, feel like there-- there is an issue here with crypto investing.
JAN GERBER: And frankly, the pure trading of-- of cryptocurrencies, um, an-- an addiction to it that can happen to just about anyone. It can happen to somebody who trades with the last $100 of their savings. It can happen with multimillionaires. Um, I believe the problem has kind of first became tangible for the addiction treatment industry, or visible, with the-- with the wealthy population.
A few years back when we got the first calls, specifically, from people that lost millions and millions in the ups and downs of the crypto market, and then realized, particularly after losses, that this can't go on like that, and then they reach out for help. In the meantime, the-- there are rehabs all over the world for all price segments, um, to help people who, uh-- who got hooked.
AKIKO FUJITA: To what extent do you think this addiction, if you want to call it that, is being fueled by some of these apps? Whether it's Robin Hood, Coinbase, I mean, we've heard about the concerns around the gamification of trading with those apps. Do you point the blame in that direction in some ways?
JAN GERBER: In some ways, yes. I think the problem has many layers, but at the core of cryptocurrencies, it's the sheer volatility, and to be honest, uh, unpredictability of the developments. It really-- you can equate it from a, you know, your psychological perspective to gambling-- online gambling. So investing in crypto, then making a windfall, even small, it creates a dopamine rush in the brain. And dopamine as a neurotransmitter that tells our brain to repeat a certain action. This comes from the back in the days when you-- when you find a sweet berry, or you-- you run away from a cyber-- cyber tooth-- Saber Tooth Tiger.
That basic instinct functionality in our brain kicks in when we trade crypto, and crypto is specifically dangerous compared to, you know, other things that can be traded. Other markets closed. Other markets are not as, um, as volatile, and are somewhat more predictable. And then, as you mentioned, those apps that make it accessible for everybody, most of those apps are not meant for professional investors.
They're meant just, basically, for an app provider to make money, to make the margins. We know, also, a lot of these apps, that they are contractual differences. They're not actually the actual underlying that is being traded. And these are gamified, as you say, so they-- they bring in additional cues, you know? Uh, prices, you know, might go up in the next, uh, 10 minutes. It's now your chance to place a trade. You get these notifications all the time, and that hits the brain, um, in a very specific way. So yes, that creates an additional layer of already a risky undertaking.
AKIKO FUJITA: Finally, Jan, I'm just curious what $90,000 a week-- what that program looks like. I mean, sure these people have lost a lot of money, but they still can afford $90,000 a week. How does that recovery program look like, and is it any different from other addictions to making money, whether that's in gambling or stock trading?
JAN GERBER: Um, the approach is very similar to a gambling addiction treatment, frankly. We have to differentiate a little bit between, you know, is somebody coming to us-- are they a professional trader, so do they have to go back? Are they making a living with that occupation, or can they actually take a break or stop this activity altogether? And that makes a massive difference. It's like, you know, somebody that's dependent on alcohol. Ideally if you can stop drinking for the rest of your life, you have a bit of an easier turn of your heads than if-- if you had to-- wanted to go back to it, and that's the same with trading.
What we do primarily is we look at the underlying reasons. Some people are more prone to addictions because they've suffered from childhood trauma, or they go through a very stressful period in life. Sometimes it can be physical pain. It can be that the neurotransmitters in our brain and body are off. We have sleep problems.
So often these compulsive behaviors, that includes crypto trading, that create these dopamine or serotonin rushes, they're used to medicate pain or distract us from problems in life, so not everybody who-- who trades a lot of crypto is automatically, you know, at risk for addiction, so we primarily look at these underlying reasons. We treat those, and then we look at, you know, what can be healthy patterns in interacting with the-- with the crypto market. It doesn't mean you can never go back to trade, but you need to be equipped with some tools to do so healthily.
AKIKO FUJITA: Yeah, um, fascinating to see the growth in that. Paracelsus Recovery CEO, Jan Gerber, appreciate the time today. Thanks so much for joining us today.