Why does crypto’s ‘one-click endorphin loop’ need to end?

Many startup founders highlight their ambition to simplify money transfers to the same level as sending an email, often framing it as a means to “democratise” finance, but this ease of one-click payments has also unintentionally fuelled detrimental behaviours such as speculative day trading and gambling-like titling. Visit to ensure that the crypto you’ve chosen to invest in is a legitimate platform.

Former UK Financial Conduct Authority chairman Charles Randell highlighted the originality of this phenomenon by referring to it as the “one-click endorphin loop.” He thinks that trading applications take advantage of the gap between customers’ financial capacity and financial literacy. An emphasis on both user education and regulatory actions is necessary to strike a balance between offering smooth payment alternatives and promoting responsible financial behaviour.

Understanding the ‘One-Click Endorphin Loop’

The “one-click endorphin loop” is an addictive cycle that develops when people trade cryptocurrencies often and impulsively. People feel excitement and expectation since trading platforms are accessible easily and prices move quickly. Endorphins are released after each profitable trade or price increase, producing a delightful experience that fuels traders’ desire to keep trading. If not broken, this cycle feeds impulsive behaviour and can have negative financial consequences.

A responsible approach in the volatile world of cryptocurrencies

The passage you provided highlights the need for tools to promote responsible gambling in the cryptocurrency sector and suggests regulators are becoming more aware of the risks of making crypto investments. These tools, intended to give individuals a moment of reflection after making a choice, are comparable to those employed by the gaming sector to promote responsible behaviour. In the cryptocurrency sector, the phrase “Do Your Own Research” is often used to emphasise how crucial it is for individual investors to spend time learning about the assets they are investing in. The passage, however, implies that many people are motivated more by FOMO, which is impacted by things like word-of-mouth, social media, and the hype surrounding growing prices. For example, the mention of Elon Musk’s tweets about Dogecoin and the speculation surrounding Bitcoin’s price targets. The reference to a Bank for International Settlements paper highlights the potential risks involved in investing in Bitcoin. This statistic emphasizes the volatile nature of the cryptocurrency market and the potential financial losses that can occur.

Consumer Pressure and FOMO

Users are often motivated to trade cryptocurrencies out of fear of missing out (FOMO) on possible profits. Social media, word-of-mouth, and the allure of rising prices have created a sense of urgency and excitement. People feel pressure to follow the trend sans fully weighing the potential risks. This FOMO-driven behaviour, in which people attempt to recapture the thrill of past profitable deals, furthers the one-click endorphin loop.

The Need for Responsible Gambling Tools

Responsible gambling tools, such as cool-down periods and self-exclusion options, have proven effective in mitigating the negative consequences of impulsive behaviour in the gambling industry. Similarly, implementing similar measures in the crypto space could help break the one-click endorphin loop. Introducing mandatory waiting periods before executing trades, providing educational resources on risk management, and promoting responsible trading practices are essential steps towards protecting individuals from making impulsive and potentially detrimental financial decisions.

Regulatory Intervention and Investor Protection

Regulators from all around the world are starting to realise that the cryptocurrency market needs enhanced oversight and investor safety. Regulators can assist stop the one-click endorphin loop by setting stronger rules on trading platforms, ensuring transparent disclosure of risks, and cracking down on fraudulent behaviour. Promoting financial literacy and informing users about the risks and difficulties associated with cryptocurrencies might also help people make better decisions.

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