The Role of Social Media in Investment

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- 06/10/2022

The Role of Social Media in Investment

There’s no denying: social media has an impact on investment world-wide. This, of course, comes in all shapes and sizes. The good part is that information now circulates freely and rapidly, giving everybody equal chances to benefit. Social media is fueling the public space with diversified content and educational material. It seems people interested in crypto, NFT and Web3 are particularly fond of the online investment community. Never before has it been more accessible to get knowledgeable about investment. 

But there’s another side to the coin. Social media can also be a stage for bad actors to infiltrate and scam people. When it comes to investing, we must learn to leverage this tool to our advantage and make the most of it, because there’s plenty to be had.

Social Media Becomes The Prime Investment Resource

In January 2021, the stock price of video game retailer GameStop Corp. suddenly peaked at $483, after sitting at $20 two weeks earlier. What started as a Reddit discussion, quickly spiraled into a very positive online sentiment that pushed the game retailer to the highest point it ever was. While wild volatility is certainly not uncommon in financial markets, it was one of the first online-driven events with such a big impact.

The event clearly showcased what influence social media and the online content can have on investment. At the end of the day, no analyst or forecast can stand in the way of so many people acting with the same purpose. This is what makes social media investment great – it gives people the opportunity to gather in numbers, efficiently communicate and take action on their plan. And this is what you should be excited about.
The history of social investment is actually rather complex and not at all something new. It originally came to life in the Netherlands at the end of the 18th century but really gained traction decades ago in the USA. Nowadays however, social media is adding a powerful twist to the entire landscape. A research from CNBC reveals that 35% of people aged 18-35 are using social media to seek investment opportunities. By offering speed and accessibility – two feats always worth having, social media investment has grown into a viable alternative medium.

Influencers vs Licensed Investment Advisers

You know the rule: DYOR (Do Your Own Research)! Don’t take investment advice lightly from anybody. Be them social media influencers or authorized financial advisors. Truth be told, you are the only person responsible for the success of your investment. 

Another important fact is that there are good and bad apples in both baskets. Meaning – there have been plenty of professional Wall-Street advisors that have wrecked so many portfolios. At the same time, social media “crypto gurus” are popping in (and fading out) at an astonishing rate. Of course, there are plenty of successful stories on both sides also, so it’s not really a matter of one versus the other. What is more important for you, an independent investor, is to get knowledgeable and educated so that it benefits your portfolio. 

If the past century has been dominated by Wall-Street hedge funds, today the road is open for all independent retail investors. So how can you take advantage of the online investment space to grow your investment?

The Pros and Cons of Social Media Investment

With the amount of content and investment communities gathered online, it’s clear to see how social media investment is driving the global crypto adoption. A positive aspect of this is that most content is easy to understand, contributing to the awareness of both young and old generations. Truth be told, not everybody has the means to access professional investment advice or financial consultants. 

As nobody is being taught proper financial education in school, we can now use social media in a meaningful way to get knowledgeable. At least social media can create a sense of awareness to the fact that investing is now within reach for most individuals in the world. 

Be aware though, the online space is in no shortage of scammers, sponsorships and product placements. On social media, credibility is a scarce commodity. Moreover, given that information is delivered most often in its essential form, important aspects might be left outside. Take your time to research properly and make sure you understand the details of every project / community you might be following. Online platforms can be a great gateway to information, but you will need to do your homework outside of it as well.

We are witnessing some very interesting investment trends currently developing. Younger and younger people are entering the field, as early as 18 years old. Moreover, fintech apps and products are introducing user-friendly solutions that gamefy investment and make it more accessible than ever before.

Another important trend is that people seem to cherish honest, transparent communities. A solid community brings credibility and multiple opportunities to learn from other like-minded people. All this is driving excitement up and we have seen what this can bring to the table. The democratization of investment is offering everybody equal chances, providing a sense of inclusiveness to the investment landscape. 

It’s easy to see why – in just a few simple steps you can onboard a DAO (decentralized autonomous organization) and start your journey into collective investment. Actually, social media is one field that can be radically transformed by social investment. And of course, the other way around is also accurate. This synergy makes way for a more democratic, user-owned, DAO based platform that would put people first, as opposed to having centralized control.

We have entered a new age of investment. Will you be taking advantage of it? Take your time to scout for opportunities in crypto, NFTs and Web3 on the Solana-based Unique Venture Clubs dApp. Do you have a plan for the current bear market? We’d love to hear all about it on Unique Venture Club’s Discord and Telegram channels. Come by for inspiration and a chat with like-minded people. 

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