- Anyone who has been in the crypto space for a full cycle will have gone through the five stages of grief, especially if they’ve been scammed
- Investors typically go through the five stages of grief when a project rug pulls on them, although they may not be aware at the time
- We examine the five stages of grief through the eyes of a 2019 crypto scam
Crypto, as anyone who has spent time in a shitcoin Telegram group will know, is full of inexperienced, emotionally charged ‘investors’ who often react to good or bad news in the most extreme of ways. Time and time again we have seen projects prey on this inexperience, hiring influencers to hype up the community amid a plethora of rocket emojis, only for the project to crash and burn and for investors to lose their money.
Naturally the reactions from the community members are many and varied, from threats of violence to more pragmatic takes on the situation, but one thing is clear – when that happens, every single investor goes through their own version of a well known process.
Five Stages of Grief
In 1969, psychiatrist Elizabeth Kubler-Ross proposed a theory that when we experience a traumatic loss we go through five stages of grief – denial, anger, bargaining, depression, and acceptance. This model has become the go-to theory as to how humans cope with traumatic events, and given the huge amounts of money being lost on a daily basis by crypto investors, we should expect some evidence of the five stages of grief to appear somewhere in the emotional outpourings of these unfortunate souls.
In 2019, the crypto project Scroll abruptly shut down, leaving the tokens worthless, and the discussions that took place in the project’s Telegram group during and afterwards were a great insight into the five stages at work. With reference to Grief.com and Psychcentral.com, let’s see how the stages and their transitions play out in the crypto space.
Stage 1 – Denial
Description: “The first reaction to learning about the terminal illness, loss, or death of a cherished loved one is to deny the reality of the situation. “This isn’t happening, this can’t be happening,” people often think.”
Stage 2 – Anger
Stage description: “As the masking effects of denial and isolation begin to wear, reality and its pain re-emerge. We are not ready. The intense emotion is deflected from our vulnerable core, redirected and expressed instead as anger. The anger may be aimed at inanimate objects, complete strangers, friends or family.”
Stage 3 – Bargaining
Stage description: “The normal reaction to feelings of helplessness and vulnerability is often a need to regain control through a series of “If only” statements. Secretly, we may make a deal with God or our higher power in an attempt to postpone the inevitable, and the accompanying pain.”
Stage 4 – Depression
Stage description: “There are two types of depression that are associated with mourning. The first one is a reaction to practical implications relating to the loss. The second type of depression is more subtle and, in a sense, perhaps more private. It is our quiet preparation to separate and to bid our loved one farewell.”
Stage 5 – Acceptance
Stage description: “This stage is about accepting the reality that our loved one is physically gone and recognizing that this new reality is the permanent reality. We will never like this reality or make it OK, but eventually we accept it. We learn to live with it. It is the new norm with which we must learn to live.”
Grief, at Speed
Looking at the comments, it’s pretty clear that the five stages were experienced by the community as a whole, with certain individuals displaying stronger emotions at particular stages, at least publicly. 95% of these comments were posted within the 36-hour period surrounding the collapse of the project, showing the speed at which crypto communities can fizz through the five stages.
Of course losing money isn’t as profound as losing a loved one (depending on the amount of course), which is what the five stages were based around, but it is nevertheless interesting to see that the stages are not only experienced but are also rattled through with incredible speed. This could be because many in the group are already used to the concept of scams, and so the concept has less of an impact on them.
Crypto Projects Ignoring Responsibility
What is also interesting to see is the fervent belief in the project that many traders have, right up to the point of collapse, even as the token was crashing further and further in price. Whether these are cases of genuine belief in the project or damaging forms of self-delusion/self-protection probably differs from individual to individual, but episodes such as this show the connection individuals can have to projects, putting even more responsibility on the shoulders of crypto projects to act in a responsible manner when things aren’t going well, which Scroll clearly failed to do.
Of course many victims of scams, hacks, and the actions of disreputable companies will cope privately, but it’s clear that the losses felt by crypto holders fit the same reactionary pattern as other traumatic events in our lives, something that these companies should be aware of before they decide to pull the plug.
