A new study from the University of Georgia (UGA) has found that social media users are more likely to invest in cryptocurrencies, with their likelihood of entering the market increasing as they engage more on platforms like YouTube, Reddit, and X.
According to the research, nearly 50% of social media users surveyed have invested in cryptocurrencies, compared to just 10% of those who do not use these platforms.
The study also found that individuals who are active across multiple platforms are more likely to invest in cryptocurrencies.
The results showed that YouTube, Reddit, X, and Clubhouse users had the highest rates of investment, while Instagram users showed less interest, which the researchers attributed to the nature of the content, as the first three platforms provide a more conducive environment for in-depth discussions via long videos and text discussions, compared to the quick visual content on Instagram.
The influence of social media extends to societal influences, with people more likely to invest because friends, family, and celebrities talk about cryptocurrencies, explained Lu Fan, an assistant professor at the University of Georgia.
The survey also revealed the impact of demographics on investment patterns.
Men and individuals with higher risk tolerance were more likely to invest, while those with higher levels of education showed greater hesitation.
Age also played a role, with older people less interested in investing in cryptocurrencies.
These findings are in line with a previous report from the National Financial Capability Study and Investor Survey, which showed that the percentage of cryptocurrency investors increased from 15% in 2018 to 28% in 2021.
Awareness of cryptocurrencies has also increased, with more than 33% of respondents considering investing in 2021, compared to less than 20% in 2018.
The study also highlighted concerns about misinformation on social media, where younger investors may overestimate their knowledge of investing, making them more vulnerable to fraud and inaccurate financial advice.
Lu Fan emphasized the importance of rationally evaluating investments rather than blindly following trends.
The research concluded by noting that policymakers should take these findings into account when developing cryptocurrency regulations, while emphasizing the need to enhance media literacy to help individuals distinguish between reliable investment advice and misleading information.
