A study was conducted in 2011 that used the patient records from hospitals in California. The results were delivered in 2014, and it was found that there was an inverse relationship between hospital admissions and daily stock returns.
According to the study, the fluctuations in the stock markets has an impact on the health of investors. As the stock prices show a sharp decline, the hospitalization rates increase in the next two days. This correlation is particularly prominent for mental health issues such as anxiety. The results suggest that investments affect the well-being of a person.
The crypto connection
These findings are not something new. We have all seen it. Financial fluctuations affect our mood. The stock market goes up and down all the time, and dips are often associated with sadness and depression. The same can be said about Bitcoin and other cryptocurrencies.
In 1987, the stock markets crashed all over the world. This brought upon a lot of mental health issues, and there were many new admissions in the hospitals in California.
There was another study on the stock market crash and its effects on mental health. In the study, more evidence was found that stock market downfall changes the mental health measures for those respondents who had large stock holdings.
The research showed that respondents who lost about $250,000 reported that their chances of depression increased by 50% and there was a drop of 20% in the chances of them having excellent health.
While these researches were conducted on the broader markets, this logic can be applied to the crypto world as well. If there’s a significant drop in the crypt market, it will undoubtedly cause a lot of stress to the investors, and this could lead to health problems.
Crypto traders feel the same emotions as those of stock market traders. So market bubbles and bursts affect them in the same way. When there’s a market dip, crypto traders may face emotions that might range from mild sadness to depression and they can also suffer anxiety and panic attacks.
Crypto has a volatile nature
Cryptocurrency prices are volatile and traditional financial experts don’t know how it goes. Crypto prices soar and drop and surprise the investors. While the stock market is linked to economic performances, crypto prices aren’t, and this is why traditional experts are unable to comment on them. The fluctuations of crypto prices are largely driven by the perception of the currency value.
While Bitcoin showed a massive peak in recent times, it is extremely unpredictable. It can rise in value by thousands of dollars in a single day and topple over the next day. What does it mean to investors, and more importantly, what does it do to their mental health?
Crypto investments can cause a roller coaster of emotions
Financial decisions aren’t easy to make. And when it comes to making decisions on something as rewarding and risky as Bitcoin, investors go through a lot of emotional stress. There have been bubbles and bursts in the crypto market, and investors have faced a lot of anxiety.
And with Bitcoin, it’s not just the market that causes panic. It’s also the possibility of hacking attempts that can wipe out millions or even billions in a single go. After all, these are the risks that come with digital assets.
Any risky trading comes with emotional and mental issues. If you’re an investor and want to minimize the mental and psychological toll that financial stress may bring to you, ask yourself, these questions (as suggested by Paul Merriman, founder of Merriman Wealth Management):
- Has your sleep been affected due to an investment?
- Have you started to compulsively and constantly follow financial news after an investment?
- When you watch the financial news, do you worry about your future?
If you’ve answered any of these questions as yes, you have bitten more than you can chew. The investments you’ve made are carrying more risk than you’re ready to handle.
Money is related to happiness
Money can’t buy happiness, but the two are indeed related. And it’s a complicated relationship. Losing wealth is often followed by losing peace of mind and becoming unhappy. But then again, sometimes, gaining wealth can also make one lose their peace of mind and become unhappy.
One study conducted in 1978 compared major lottery winners with a control group. The research found that the level of happiness in lottery winners was not more than that of the control group. Also, their happiness wasn’t increased from the days when they hadn’t won the lottery. Essentially, the lottery win hadn’t done anything to raise their happiness level. In fact, they had become less happy when carrying out mundane tasks.
This study showed that the sudden increase in money does nothing to increase the happiness level. But the other studies mentioned above suggest that the sudden drop in money leads to a decline in happiness. Perhaps, money is the root of evil? A thought to ponder upon.