​Buying crypto won’t save you from financial anxiety – it might make it worse 

Open this photo in gallery:New research published in the Review of Behavioral Finance suggests that crypto investors don’t get the same psychological benefits from emergency savings. Bitcoin enthusiasts take part in the kick-off of the Plan B Forum El Salvador, in San Salvador, El Salvador, on Jan. 30.Jose Cabezas/ReutersPlease log in to bookmark this story.Donald Trump is delivering on his promise to be a “crypto president.” He’s taken steps to study the feasibility of stockpiling cryptocurrency following his crypto-friendly campaign to return to the White House. And he’s launched his own meme-coin.For some investors, that’s all the encouragement they need to pile into bitcoin, ethereum, and other digital assets. After all, if this U.S. administration is going to push for pro-crypto policies, shouldn’t you get in before the next boom? Does it also legitimize voices who say holding crypto will save you from some kind of reset of the monetary system?Not so fast. With uncertainty over global trade, the markets, the cost of living and more, financial anxiety in general is high. One of the tenets of personal finance is that having an emergency fund helps one weather a variety of financial storms. And this buffer also serves to reduce financial anxiety.But new research published in the Review of Behavioral Finance suggests that crypto investors don’t get the same psychological benefits from emergency savings, and furthermore, they tend to be more financially anxious during uncertain times than non-crypto investors. In other words, even people with a financial cushion feel less secure if they’ve also put money into digital assets.Many investors believe that crypto is a hedge against uncertainty. Part of the logic is that if traditional markets are unpredictable and inflation is eating away at savings, moving money into crypto provides a form of protection. The problem is this theory doesn’t hold up in reality.The study examined how crypto investments affect financial anxiety, especially among those with rainy-day savings. The findings were clear: while having emergency savings generally reduces financial stress, this benefit is significantly weaker for those who invest in crypto.Why? Because crypto’s extreme volatility doesn’t provide peace of mind – it fuels stress. When markets tank, investors in stocks and diversified portfolios may feel the pinch, but crypto holders often feel sheer panic. The study found that crypto investors were more financially anxious overall, and when facing job loss or financial distress, they experienced significantly more stress than non-crypto investors.Mr. Trump’s pro-crypto stance may encourage a new wave of retail investors to jump in, believing that political support equates to market stability. This is a dangerous misinterpretation. Government friendliness toward an industry doesn’t change the fundamental risks of that industry.We’ve seen this cycle before: hype builds, speculation gro