Friendly Reminder: Celebrities Endorsing Cryptocurrencies Doesn’t Mean Much

Friendly Reminder: Celebrities Endorsing Cryptocurrencies Doesn’t Mean Much

‘Cryptocurrencies’ This year’s trip from the Moon to Earth has curbed a strange phenomenon of the 21st century: celebrity endorsement of cryptocurrencies.

Matt Damon, Larry David and Tom Brady have all been quiet about cryptocurrencies as ad dollars in the industry have evaporated along with investor interest, according to recent reports.

And Kim Kardashian wouldn’t talk about crypto even if she wanted to, as the Securities and Exchange Commission banned her from promoting crypto for three years.

The Securities and Exchange Commission takes notice

This latest move from the SEC serves as a reminder that Super Bowl commercials and celebrities’ social media accounts may not be the best source of investment advice. People who bought at the height of the crypto craze may not get their investment back for years – if any – depending on the currency they bought. Now some of the stars who signed up to promote risky digital assets may wish they had walked away.

Under Kardashian’s settlement with the Securities and Exchange Commission, the ubiquitous influencer also paid a $1 million fine and lost $250,000 — which was allegedly paid for talking about the mysterious token EthereumMax via Instagram — plus interest. (Kardashian admitted he did nothing wrong.)

Meanwhile, EthereumMax is trading at less than a millionth of a cent. That’s 99% lower than the high he reached shortly before Kardashian began promoting it in June 2021.

Celebrity endorsements are found throughout society, from car ads to medical devices and political campaigns. But when Joe Montana talks about Medicare plans, the Securities and Exchange Commission won’t touch. Crypto, on the other hand, has been a particularly annoying place for paid spokespeople in part because of the sector’s reliance on hype to fuel its rapid growth — and the explicit rules the Securities and Exchange Commission has put in place about exactly that thing.

Inject this coding spirit

Early-stage crypto projects often offer rewards to influencers and ordinary citizens for promoting their project via social media. these cryptocurrency “airdrops” They can be legitimate ways to get a new asset circulating in the market and help people learn about it.

But sometimes there are darker motives in the discourse about certain cryptocurrencies. Some developers have been accused of promoting their cryptocurrency not out of sincere belief in the product but as a way to increase demand before selling and leaving. This is known in both SEC parlance and Reddit as the dreaded “pumping and dumping”.

The Securities and Exchange Commission (SEC) has focused on celebrity advice on cryptocurrency for half a decade. In 2017, the agency issued a statement urging investors to question the motives of anyone who is paralyzing digital assets.

“Celebrities and others are using social networks to encourage the public to buy stocks and other investments,” the SEC said at the time. “Such assertions would be unlawful if they did not disclose the nature, source and amount of any compensation paid by the company, directly or indirectly, for the endorsement.”

A year after the SEC statement, boxer Floyd Mayweather Jr. and musician DJ Khaled have agreed to SEC penalties after being accused of violating these rules with their crypto projects. (They also admitted that they had done nothing wrong.)

Prefer luck… who?

The cryptocurrency symbiosis/celebrity symbiosis only took off until the historic crypto bull run of 2021. As the asset class established itself near the mainstream, central crypto exchanges sought out household names to help promote their products.

Instead of promoting individual investments, this latest crop of celebrity endorsements like Tom Brady, Larry David and others have taken a more conservative approach to talking about cryptocurrencies in general. The coding was baffling, but awesome. It was a bold and forward-looking choice for true leaders.

In a commercial for cryptocurrency exchange FTX, Larry David highlights his lack of understanding of the new asset class. In another clip, Tom Brady and Gisele Bundchen called all of their friends to announce that they were “getting into crypto.”

And in a much-discussed (and often ridiculed) place of Crypto.com, Matt Damon delivers his greatest shows as he urges viewers to Putting their money into crypto.

“In these moments of truth, these men and women—these are mere mortals, just like you and me—looking over the edge, calm their minds and stir their nerves with four simple words that have been whispered by the brave since the time of the Romans: Wealth favors the brave,” says Damon.

As it turned out, it might have been wise for cryptocurrency buyers to stand a little off the edge. Even big cryptocurrencies like Bitcoin traded at about a third of their value last year.

In May 2022, as the cryptocurrency market like Wile E. Coyote plunged, NBC News contacted ten crypto spokespeople including David and Damon. None of them have commented.

Whatever a celebrity tells you, personal investing is usually a lot less exciting than it looks on TV. Most people are well served by a Diverse wallet It includes a mix of different asset classes. Risky bets like cryptocurrencies should generally make up a small part of that.

Another sad aspect of investing is that you want to think long term, and that means a bear market can be an opportunity. If you believe in the long-term value of bitcoin when it was $60,000, you can definitely get more for the dollar now that it has reached $20k.

After all, wealth favors the brave, right?

The author and editor owned Bitcoin at the time of publication.

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