The values of cryptocurrencies such as bitcoin and ethereum have plummeted in recent months. And with the crash, some celebrities who advertised cryptocurrencies have come under fire for encouraging people to invest in them.
emily stewartVox Senior Correspondent, wrote about the relationship between celebrities and financial products and services. She spoke with “Marketplace” host Kai Ryssdal about the endorsement relationship. The following is an edited transcript of their conversation.
Kai Ryssdal: Celebrities endorse things all the time. Why is that money sponsorship relationship any different?
Emily Stewart: Well, I guess it’s one thing for a celebrity to tell you to buy a bag of chips, right? If you don’t like fries, they’re disgusting, that’s fine. But when it comes to your money, the story is a bit different. Obviously, they are slightly higher stakes than the chips you don’t like.
Ryssdal: So can we talk about crypto specifically, which is what, honestly, you know, back during the super bowl and Matt Damon and “fortune favors the brave” and all this. And now cryptocurrencies are tanking and I’m like, “How do you feel now, Matt Damon?” You’re probably not too worried about that, but people who bought crypto because Matt Damon said fortune favors the brave are out of luck.
Stuart: Right. I mean, I think it goes without saying that it’s not always a good idea to follow celebrities in any investment. Celebrities are rich, for reasons that have nothing to do with their cryptocurrency investments. Whether it’s Reese Witherspoon, Tom Brady, or Larry David, I’d venture to guess that these people have investment managers who are probably telling them not to do a lot of crypto. But, you know, we really saw, I think, at the beginning of the year and at the end of last year just a bunch of celebrities really diving into crypto. And it really incorporated crypto in a way that felt a little bit different to me. And I think a lot of people, you know, got really excited and didn’t realize that crypto has historically gone through these boom and bust cycles. And right now we’re in a crypto winter, I guess.
Ryssdal: Works? I mean, is Tom Brady doing whatever that weird ad snap was? I don’t even remember, but does that make people buy crypto?
Stuart: I mean, it’s hard to say. You know, Morning Consult did a poll that found that around 20% of investors and 45% of crypto owners said they would invest in crypto if famous people endorsed it. That was behind financial advisors and family members or business reporters. But that is nobody. And I think more broadly, as I said before, there is this integration. Like maybe I didn’t see the Tom Brady ad or the Larry David ad and then I bought bitcoin or whatever. But it puts it more into the water stream in a way that maybe I start to think about it.
Ryssdal: Look, the first time I heard about that Matt Damon ad, that, you know, a lot of Super Bowl ads run, you know, a day or two before, whatever, but even if you didn’t see the Super Bowl, you saw Matt Damon’s “fortune favors the brave” ad somewhere on your social media. And that has to be the multiplier.
Stuart: Right. That’s the thing, it’s everywhere. And you see this stuff all the time, where maybe, you know, it’s not a single commercial that you’ve seen, but it just kind of gets in there. Even last year, I had friends who never in their life asked me anything about investing and all of a sudden they said, “Hey, but I need to make some quick money. Do you think I should get into crypto? And the answer there is absolutely no. And if you ask me about it, it’s too late.
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