The overwhelming impact of social media on the mindset of investors

- Work from home, loan moratorium, high level of personal savings and social media platforms motivate new retail investors to trade in the stock market.

From social media

'Self-proclaimed investment adviser' rips apart, they can mislead innocent investors by taking advantage of chat rooms to promote their agenda '

Social media has become more prevalent in the digital age and reports that go viral have a profound effect on the stock market, cryptocurrency and investor-trader mentality. The most popular example of this recently is a tweet by Alan Musk, the owner of the Tesla company.

In January, Alan Musk tweeted only two words - 'use signal'. He was indirectly telling his followers to download the 'Signal' app. Following Musk's tweet, followers of Signal Advance bought shares of the company, which jumped 11,303 per cent in just three days. Another example is the Wall StreetBates forum on the Reddit website advising small investors to buy shares of a videogame company. Shares of GameStop jumped 1,200 per cent in January, giving hedge funds a chance to "relax". Shares of the company jumped from 15 to ૪૮૩ 6, after which the stock plunged to ૫૫ 6 in the first week of February.

Apart from this, there are many other events which give an indication of the depth and effectiveness of social media. Social media has the potential to deeply influence the share prices of companies and the mindset of investors, which in turn can lead to big fluctuations in the share price.

The 'investment bubble' is defined as a rapid rise in property prices, followed by a rapid and often catastrophic crash. If you look at the past, it has the most famous phenomenon - 'Tulip Mania' which was created in the 180's, when Dutch citizens rushed to buy rare tulip bulbs in the hope of reselling for profit. The bubble burst in 19 and the Dutch economy collapsed.

Centuries later, in the late 150's and early 2000's, the dotcom bubble brought a wave of speculation around the world. The Nasdaq Composite Index rose 3% from January 19 to March 2000, as investors rushed to buy shares of technology startups. By 2009, investors were expected to lose ૫ 3 trillion.

Today, social media and technology have added new components to stimulating investment. Consider the latest craze, non-fungible tokens (shakh), which represent ownership of unit items such as art, collections or even social media posts. For example, in March this year, Twitter CEO Jack Dorsey sold his first tweet in the form of NFT for ૨૯ 3 million.

An economist at the Australian National University, Dr. Tim Henkel called Bitcoin the "mother of all bubbles." ‘The boom bubble doesn’t come from anywhere, there’s a real basis for it, and it usually involves innovation - some kind of new product or new technology that stimulates people’s imagination, builds a story around it and people move it forward. Social media is doing this today. '

The cryptocurrency marketing teacher at Melbourne Business School, Dr. There are a large number of cryptocurrency communities on Twitter, says Brent Cocker. Cryptocurrency traders usually have things like a tweetdesk, which helps them organize their subject. Much of the price movement in cryptocurrencies is based on speculation, much higher than conventional stocks.

Analysts say the rise in asset class, like Shakhd, indicates that investors' perceptions of value are changing. The urgency of social media means that a large market segment of retail investors can be notified and influenced in real time. This can play a big role in buying and selling stocks at the individual level. Of course taking investment tips from the internet carries the risk of certain biases.

The growing use of social media, online forums and messaging applications has led to a flurry of self-proclaimed investment advisors. Of course, while viral messages have helped maintain market interest and increase mobility, there are concerns that "such people may mislead individuals by taking advantage of chat rooms to promote their own agendas."

‘Trading manipulation’ or ‘pump-and-dump’ schemes, which involve the activity of bringing the stock to a certain price level or deceiving investors by controlling or manipulating the stock price, is unacceptable and a violation of the rules. - A recent example of this is the speculative rally in Gamestop stocks.

The big fluctuations in the market due to the epidemic have drawn new investors into the world of stocks. Work from home, loan moratorium, high level of personal savings and social media platforms have encouraged small investors to trade in the stock market.