“Bitcoin blues” is becoming a real disease in Korea, doctors report
South Korea's unresolved economic problems are getting a new name in the form of "bitcoin blues".
Psychologists in South Korea are reporting a growing spate of patients presenting with symptoms of the "bitcoin blues," reports Korea Biomedical Review. It has been described as a kind of cryptocurrency-related depression, with many who have bought substantial sums reporting headaches, insomnia, a loss of appetite and other symptoms.
Meanwhile, those who haven't touched it are often impacted by those around them and feeling similar symptoms as a result of feeling like they missed out on their big chance.
Cryptocurrency took off in South Korea quicker and earlier than anywhere else. A hyperconnected society, digital asset awareness and unusual political timing all came together to lay out a red carpet for cryptocurrency adoption.
In most places, only a tiny handful of people got in early enough to become cryptocurrency millionaires. But in South Korea almost everyone has a friend, or a friend of a friend, who made an extraordinary amount of money. Crypto-millions came to life much more clearly and closely in South Korea than elsewhere, which might make a distinct impact.
This is compounded by the extreme housing crunch facing South Korea. The capital of Seoul houses half the country's population and has around twice the population density of New York City, and four times the density of Los Angeles.
Barring the possibility of a massive windfall of the kind that cryptocurrency delivered to so many people around South Korea, finding a place for oneself is blatantly beyond the reach of most. As of 31 March 2018, the average deposit for just renting an apartment in Seoul was well over half a million Australian dollars, to say nothing of actual home ownership.
"I can work for the next 30 years. I can pay off debt for a two-bedroom house that I don’t really like that much and a car. And that's the end of my life," says Dongseo University professor Justin Fendos, describing the prevailing mindset. At the same time, it's extremely difficult for young people to get a foot in the door in the extremely competitive environment. It's one of the most educated countries in the world, with almost 70% of Koreans aged 25-34 having a post-secondary degree. Despite that, young people in South Korea are still being battered with a 38% underemployment rate, according to Fendos.
And in a twist of timing, South Korea's youth unemployment rate reached its all-time high of 10% in December 2017, right when cryptocurrency prices reached their own all-time highs.
In most cases, working hard for one's entire life is neither a reliable nor viable route to financial success in South Korea.
Even if a young Korean does have disposable funds, investment opportunities are thin on the ground, Fendos notes. Real estate was the traditional option, but in recent years, it's even started moving beyond the reach of the upper-middle class and locking out the vast majority of people in the country. Savings accounts, meanwhile, rarely dispense more than a few percentage points a year.
"So, they’re looking at this and they’re asking, what can I do to escape this?" Fendos says.
"...the door is constantly being shut on them, and the benefits of this society are going to the very few at the top," agreed Jason Cho, an advisor at Bitcoin Center Korea.
Along comes bitcoin.
When working hard doesn't do it and traditional investments are off the table, you're left with the long shot, which is reinforced by constantly circulating tales of those who made their fortunes.
"One of the senior managers at my company invested 100 million won into Bitcoin and quit his job after making 20 billion won (about AUD$25 million) from it," says an employee at an investment firm, known only as Kim, to Korea Biomedical Review. "I didn't get to see him in person, but he's a legend here."
"You hear all these people gaining so much extra income from it," said a student named Yun. "You have your friends who had nothing, suddenly they’re buying cars. And you start to feel some jealousy."
"My manager invested 100 million won (about AUD$125,000) into Bitcoin. He doesn’t do anything during work hours except talk about Bitcoin. He starts work when people start leaving at 6 pm, which means I also have to stay until 10 or 11pm," said a junior bank employee named Park. "I should have bought Bitcoins last year. I hear stories about people who win millions, and it makes me resent my life. Thinking about going to work tomorrow makes me want to die," he said.
In a country that was already well divided between the haves and have-nots, cryptocurrency very quickly became the thing to have.
"The younger generation, especially, is comparing the money they earn through hard work, often an annual salary of $25,000 to $35,000, with millions made by their peers through virtual coins," wrote Marian Chu for the Biomedical Review.
Garrick Hileman of the University of Cambridge suspects cryptocurrency is having an effect on the social fabric of the country.
"[Cryptocurrency] is creating a sort of depression," he said. "South Koreans are apparently losing motivation to go to work. They are watching their peers make 10 times what they’re making in their day jobs just by speculating on cryptocurrencies."
"People are seeing relatively small sums of money rising 10- to 20-fold to the millions," said prominent Korean psychiatrist Dr Noh Gyu-shik. "They can't just ignore what's going on because the winnings are so large. It's also difficult to not compare themselves to others. Some may feel like they missed out while resenting their peers' success."
Along come the bitcoin blues.
What goes up must come down. Cryptocurrency prices crashed hard from their all-time highs at the end of 2017, and have since continued to lag. There have already been several suicides believed to be linked to cryptocurrency trading losses.
It may or may not help that there's also a sense of camaraderie around the drops. The hyperconnected social media nature of South Korea that helped drive cryptocurrency adoption also means price drops are shared widely.
At the same time, crisis counsellors, therapists and psychologists in South Korea are seeing a surge of new visitors, with Channel A News reporting that many people are seeing worsening physical and mental health, compounded by a surge of related problems like homelessness, marriage breakdowns and unhealthy social issues resulting from cryptocurrency losses.
Is it a real condition?
It's safe to say that "bitcoin blues" is a very real, brand new condition in South Korea. At the same time, it's not actually anything that new. Mental, physical and financial health have always been closely connected.
For example, the British Journal of Psychiatry conservatively estimates that over 10,000 suicides were the direct result of the GFC, which was unnecessarily triggered by an obviously unsustainable load of toxic housing debt in the USA.
Meanwhile, these connections are an especially well-trodden path in Korea. Bitcoin Talk, one of the country's most popular cryptocurrency forums, has pinned the current temperature of the Han River (a frigid 12.1 degrees at the time of writing) to its home page. This is a reference to the expression "How cold is the Han River?" It's a jokey suicide expression that emerged following the Asian Financial Crisis in 1997, during which a fair number of suddenly-bankrupt people leapt to their deaths in the river.
Plus, South Korea was also the world capital of heavy drinking and suicide (with a strong correlation between the two) long before cryptocurrency arrived. Bitcoin blues is just a new name for the unresolved problems that South Korea has been unsuccessfully grappling with for a long time.
"I don’t think a lot of people were thinking they would have some luxurious life, going around in a yacht and traveling the world," said one trader. "People just wanted to buy a house. That’s why they were going so crazy."
Disclosure: At the time of writing, the author holds ETH, IOTA, ICX, VEN, XLM, BTC and XRB.
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