Study: Social Media Users Are More Likely to Invest in Crypto

A new study from the University of Georgia (UGA) has found that social media users are more likely to invest in crypto.

The research concluded that engagement on platforms like YouTube, Reddit, and X increases the likelihood of investing in digital currencies.

Social Media’s Influence on Crypto Investments

The UGA review found that approximately half of social media users surveyed had invested in crypto, compared to just 10% of those who do not use social networks. Furthermore, it concluded that the more platforms an individual engaged with, the more likely they were to invest in the asset class.

Those on YouTube, Reddit, X, and Clubhouse showed the highest investment rates, while Instagram users demonstrated less enthusiasm for crypto. The researchers suggested that this is because the first three facilitate discussions about crypto through long-form videos and text-based threads as opposed to Instagram’s visually oriented content.

“A lot of people talk about cryptocurrency on social media and how popular it has become,” said Lu Fan, an associate professor at UGA. “There are a lot of celebrities talking about this. People are thinking, ‘Because my friends, family, and the celebrities I admire all invest in that, maybe I should too,” she added.

The survey also revealed that investment patterns were influenced by demographics. Men and individuals with a higher risk tolerance were more likely to invest in crypto, while those with higher education levels were less inclined. Age also played a role, with older people showing less interest.

Growth of Crypto Investments and Risk Awareness

UGA’s findings are similar to a past report from the National Financial Capability Study and Investor Survey, which showed that in 2018, 15% of participants had invested in crypto. By 2021, that number had risen to 28%. The 2021 version of the survey also found that awareness had increased, with more than one in three participants considering an investment, compared to less than 20% in 2018.

The University’s analysis also highlighted concerns about misinformation on social media. The researchers found that younger investors, who make up the largest part of the demographic, may overestimate their investment knowledge and be vulnerable to scams and poor financial advice.

Professor Fan emphasized the importance of evaluating whether crypto aligns with an individual’s financial goals rather than making investment decisions based on social media trends.

The research concluded by suggesting that policymakers consider these findings when developing regulations for crypto markets. Additionally, it called for increased efforts in media literacy education to help people distinguish between credible investment advice and misleading information.