There has been an increase in finance-related content on TikTok lately, as a result of the GameStop shares turmoil. Regulators, however, warn: the tips shared on the app are rather risky.
The FCA has stated that viewers should be particularly cautious when hearing promises of high-return investments. Thousands of videos that speculate on the subject of finance have spread like wildfire. None of them, however, include any information about the risks involved in stepping into the financial market.
TikTok has now informed the public that all content that looks like an attempt to deceive people and cause any unlawful financial disadvantage has been removed from the platform.
A dozen popular TikTok content creators have been actively encouraging their followers to buy shares of GameStop, BlackBerry, and some other companies. These companies have experienced a significant increase in share prices at the start of the year, as a result of Reddit-based communities of financial amateurs who have been urging one another to invest. Some videos of encouragement to invest in Dogecoin (a Litecoin-based cryptocurrency) have also been going viral.
Over a few million “financial advice” videos have been posted with hashtags, like #bigstocktips, #stocktok, #stockstobuy, and countless others.
Almost none of these videos include any warnings about what a serious matter investing actually is. They do not address the fact that these tips are given out by people who don’t have any financial education or much experience on the market themselves.
Some of them use charts of previous market fluctuations as proof that they can guarantee the outcome of the current situation and, therefore, vouch for how effective their advice is. The fact is, previous market dynamics can never guarantee the outcome of its current performance. Using TikTok calculator money to define your account’s potential is a way safer way to earn a little extra.
An interesting idea that cryptocurrency prices can be affected by the positions of the planets has even emerged on the popular social media app. According to a popular astrology enthusiast, it is not wise to invest in Bitcoin, while Mercury is in retrograde. The same logic was applied to the dynamics of Tesla and GameStop shares.
The FCA spokeswoman had expressed her concerns about the importance of consumers being cautious of adverts and advice online and on social media promising high return rates on any types of investments. A thorough research should be done on the product that is being considered as a potential investment opportunity, she concludes.
The FCA has also expressed their hopes regarding the new online safety bill. They find that the “financial harms” section should be undoubtedly included due to the risks unregulated financial advice brings on the users. For the moment, the FCA is occupied with taking down content that breaches their regulations on their own.
Paxful, a cryptocurrency trading platform, discovered that approximately 14% of the “financial advice” content does not include any warnings about the risks trading on the financial market entails. Such conclusions have been drawn after a thorough analysis of over 1200 TikTok videos. In total, these videos have over 16,765,837 views and 2,239,684 likes. You can compare the volumes of imact of certain accounts yourself by using the TikTok calculator.
The danger of this sort of content lies in the over-simplified advice and encouragement of investments. These videos create an impulsive urge in inexperienced traders to make a break in the world of finance. They are not aware of the complexity and risks of the system at all.
Financial education providers have noted that TikTok simply does not provide an opportunity to deliver an in-depth analysis and advice. The videos are just way too short for all of that.
TikTok is not the place to get educated. After all, there is not much one can learn from a 15-second video, is there?
If you are actually serious about becoming a trader, you should do thorough research, determine your personal goals and develop a strategy that will work best for you. This should be also done with an expert who will take their time to explain all the pros and cons of being a trader. Most of all, you have to understand this is not something that will make you rich overnight, despite what some TikTokers might say.
The truth is that some of the bloggers who share their expertise on the matter on TikTok might be selfishly motivated to recommend certain stocks they already invested in themselves. A spike in demand will increase the price. Then they will be the only one actually making a profit off of the advice they gave.
A simpler way to earn from the app is to use TikTok money calculator to develop a strategy for your brand.
TikTok claims to have removed all the content that promotes questionable investment strategies or any sort of scams. They also stated that they are committed to creating a safe environment on the platform, which entails educating the community about cyber hygiene and media literacy.
Be careful who you trust and make sure you are aware of all the aspects of investing before you become a trader. And if you feel like you’re not ready yet, try promoting your TikTok in the meanwhile. You can start building your TikTok brand by going here to buy real TikTok followers. There is a good chance you will be satisfied with just the TikTok money.
Disclaimer: The views and opinions expressed in this article are those of the authors and do not necessarily reflect those of Geek Vibes Nation. This article is for educational purposes only.