UGA study finds 50% of social media users invest in crypto

A recent University of Georgia (UGA) study reveals a correlation between social media usage and cryptocurrency investments. 

The research indicates that individuals active on social media platforms are more inclined to invest in digital currencies.

The study, published in the International Journal of Bank Marketing, aimed to explore the relationship between social media activity and crypto investment behavior. 

Researchers Kyoung Tae Kim and Lu Fan conducted the study, asserting it is among the first to examine social media's role in cryptocurrency investment. 

According to the study, approximately half of social media users surveyed have invested in crypto, compared to only 10% of non-social media users.

"A lot of people talk about cryptocurrency on social media and how popular it has become," stated 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 study found that the more social media platforms a person uses, the more likely they are to invest in crypto assets. 

Platforms such as YouTube, Reddit, and X (formerly Twitter) showed the highest investment rates among their users. 

Instagram users, on the other hand, demonstrated less interest in crypto investments, possibly because the platform is more visually oriented.

Demographic factors also play a role in investment patterns. 

According to the survey, men and individuals with a higher risk tolerance are more likely to invest in crypto, while those with higher education levels are less inclined.

Age also influences investment decisions, with older individuals showing less interest.

The UGA's findings align with a prior report from the National Financial Capability Study and Investor Survey. 

The previous report indicated that 15% of participants had invested in crypto in 2018, which rose to 28% by 2021.

The study also raised concerns regarding misinformation on social media.

Researchers suggest that younger investors might overestimate their investment knowledge and be more vulnerable to scams.

Professor Fan emphasised that individuals should assess whether crypto aligns with their financial goals, instead of relying on social media trends.

The research suggests that policymakers should consider these findings when creating crypto market regulations.

The study also advocates for increased media literacy education to help people distinguish between credible investment advice and misleading information.