Why People Buy Belonging and Call It Investing
Most people don’t discover a crypto asset by reading its documentation, they see the community first. A post enters their feed. Then another. They begin recognizing the same accounts, jokes and references. They learn who built the project, who supposedly failed to understand it and which competing community should not be taken seriously.
They enter the Telegram group or Discord server. They watch a founder interview. They follow a few influential holders. Eventually, they can explain the culture around the asset before they can explain its economics. Then they buy. By that point, the transaction feels like moving from the audience into the group.
Traditional investing is usually described in the opposite order. An investor studies an asset, decides to purchase it and may later meet other people who own it. In crypto, the community often arrives before the financial decision. Sometimes it is a membership card with a price chart.
Crypto Made Ownership Socially Visible
People have always invested partly because of what other people were doing. In a field experiment conducted through a brokerage, researchers separated the informational effect of seeing a peer invest from the social value of owning the same asset. The probability that participants bought an asset increased not only when they learned that a peer wanted it, but even more when they knew the peer already owned it. The economics of the asset had not changed. Its social meaning had.
Crypto amplifies this by allowing ownership to be public, portable and visible in real time. A wallet may indicate what someone owns, an NFT can become a profile image and a token can grant access to private channels, governance privileges, events, airdrops or status inside a project. Even if there is not a formal benefit, having the right asset can show someone is early, aware or devoted.
So the investment becomes part of an online identity, not hidden inside a brokerage account.
A 2026 study examining purchase intentions for profile-picture NFTs found that the number of celebrities owning NFTs from a project was the most influential attribute, followed by the size of its community. Both ranked above the floor price and the commercial rights attached to the NFT
That doesn’t mean buyers were acting irrationally by buying an image or a speculative bet, they were also buying into a community that other people could recognize and respond to.
Memecoins make this even more explicit. In a February 2025 staff statement, the SEC’s Division of Corporation Finance described memecoins as crypto assets typically purchased for entertainment, social interaction and cultural purposes, with their value driven primarily by market demand and speculation rather than functionality.
In other words, some parts of the crypto market already sell belongings without pretending to sell much else.
The harder cases are the projects that combine a real product, a token, and a powerful community. There, social and economic benefits become much more difficult to separate.
In Crypto, Community Can Actually Matter
It would be easy to conclude that community-driven investing is just a softer term for irrational speculation but that would miss what makes crypto different.
A public company can continue operating even if its shareholders never speak to one another. A crypto network may depend on its community for development, governance, liquidity, security, education and distribution. Users test products, developers improve open-source code, validators and miners secure networks and liquidity providers make markets usable. But community members translate technical information, answer questions and persuade other people to participate.
Where things go wrong is when investors skip over a key point: a community can generate real value, but that value doesn’t always make its way to the token itself. For example, a protocol may attract thousands of users while its token stays optional or a governance token may provide voting rights over decisions that generate no financial benefit for holders. So “strong community” is not a valuation model.
The Missing Link Between Attention and Token Value
Crypto discussions often treat community size as if it automatically increases the value of an asset. More followers equals more awareness, and more awareness means more buyers. If there are more buyers, the price will be greater. That argument may work for the short term, but it is a description of recruitment, not value generation.
The investing thesis has to be effective in explaining what happens when a new person comes in. Are they using a product? Fees for transactions? Offer liquidity? Run infra? Lock and collateralize tokens? Cut off supplies from circulation? Or is it largely about buying the token and starting to recruit the next buyer?
This is an important distinction, because both types of communities might appear healthy from the outside. Both can create lively chats, viral posts, big events and ongoing announcements. One community is building the economic framework around the asset, the other one is to increase the number of people exposed to its pricing.
Often the market rewards both during periods of rising pricing. When there are no more fresh buyers coming, the difference is clear. A real network might still be executing transactions, collecting fees, or supporting apps. A membership market must continue to make membership attractive.
That’s why cultural value is so important for assets with weak or indirect value capture. The less evident the economic incentive to own the token is, the more social energy may be needed to preserve the desire to hold it.
When Selling Becomes Betrayal
The clearest sign that an investment has become a membership is the language used around leaving. Ordinary portfolio decisions do not require moral judgment. An investor may reduce a position because the valuation changed, a risk emerged or another opportunity became more attractive.
In identity-driven crypto communities, selling can acquire a different meaning. A seller did not simply reassess the asset. They “lost conviction”, they had “paper hands”, they were never really part of the mission, they left the group before its eventual victory. This creates a cost that does not appear in tokenomics.
An investor who sells may lose access, status, friendships or the audience built around supporting the project. An influencer may lose followers by changing a public position. A community member may have to admit that months of confident posts no longer reflect what they believe. So the social exit may be much harder than the financial one.
Regulators have repeatedly warned that controlled social environments can also be used for direct manipulation. The CFTC notes that promoters of fraudulent digital assets may move users into messaging groups where they can control the conversation and remove people who question the claims being made. It also warns that apparently large groups may include fake or coordinated accounts designed to manufacture credibility.
A Community-Adjusted Crypto Test
A smarter way to look at it is to separate community value from investment value. Before putting money in, an investor can run through five simple tests.
1. The Tokenless Product Test
What if the token price just sits flat for three years? Would people still actually use the product? Would developers keep building? Would users pay for the service? Would validators, liquidity providers or other participants see a reason to stick around?
If the whole thing only functions while the token’s going up, you might not have users, you might just have holders being subsidized.
2. The Value-Transmission Test
Complete this sentence without using the words community, adoption, ecosystem or growth: More people using this network increases the need for the token because…
The answer should describe an actual mechanism. Perhaps the token is required to pay fees, provide collateral, access scarce resources or secure the network. Maybe usage generates income that is distributed, used for buybacks or otherwise connected to holders.
3.The Wallet-Off Test
Suppose none of that exists: no one can see what you bought, you can’t put the token on your profile, there’s no special role in Discord, and posting about it won’t get you any recognition. Nobody will know whether the position was held through a downturn or sold at a profit. Would the asset still be attractive at the same price?
This test shows how much of the purchase is being made for social reasons.
4. The Outsider Test
Write the investment thesis using only sources produced outside the project’s community. Then write the strongest argument against the asset.
What would a competing founder say? What would a former community member say? What would a user who likes the product but refuses to hold the token say?
If the thesis survives only inside an environment where everyone already owns the asset, it has not been properly tested.
5. The Exit Test
Before entering, decide what would justify leaving.
It could be declining product usage, a change in token supply, persistent insider selling, loss of developer activity, security failures or evidence that the token is unnecessary to the product.
The condition should be measurable and written before the purchase.
Put Belonging in a Separate Account
There is nothing really wrong with paying for participation. People spend money on hobbies, events, professional networks, collectibles and entertainment. A crypto community may provide education, relationships, opportunities or a genuine sense of shared purpose.
That value does not have to be converted into a financial argument. A useful approach is to separate crypto purchases into two mental accounts
- Investment capital is expected to produce a financial return. It must compete with other uses of money and be reviewed through risk, liquidity, valuation, and opportunity cost.
- Participation capital pays for access, culture, experimentation, entertainment or the experience of supporting a project. It should be sized like a discretionary expense, even when the asset attached to it may appreciate.
The same token can live in both buckets. Some of it might rest on a solid economic case, the rest might just be the cost of being part of something. The error is treating the whole thing as an investment rather than recognising that part of it is essentially a membership fee.
Why People Buy Belonging and Call It Investing was originally published in The Capital on Medium, where people are continuing the conversation by highlighting and responding to this story.
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