Celebrities are often paid to promote cryptocurrency projects, many of which lose most or all of their value or turn out to be scams. Whether it is an unknown cryptocurrency or another expensive collection of JPEG NFTs, very few celebrities should be trusted for crypto endorsement.
Celebrities endorsing crypto projects is not a new practice, and people getting ruined by celebrity-endorsed cryptocurrencies and NFT projects is not new either. During the crypto bull run of 2021-2022, many celebrities were paid for promotional material, such as the Larry David’s Super Bowl ad or Matt Damon’s commercial for Crypto.com. New crypto projects frequently allocate a budget for marketing and will pay crypto influencers to promote their crypto to retail crypto investors looking for the next “100x alt coin gem.“
However, serious projects do not usually pay celebrities to promote their token as it is more efficient and affordable to pay for ads and crypto influencers. Celebrity endorsement almost always results in a Crypto ‘pump and dump’ scam which ruins the project. For example, Forkast reported on Kim Kardashian’s $1.26 million fine by the SEC for failing to disclose a $250,000 fee to promote the EthereumMax (EMAX) cryptocurrency on her Instagram in mid-June 2021. CoinMarketcap EMAX’s price history shows that the price of EMAX is down nearly 70 percent since the Kardashian promotion, meaning every Kim Kardashian fan who bought EMAX lost most of what they invested. EMAX was also advertised by boxer Floyd Mayweather and was the only cryptocurrency accepted. as payment for his fight against Logan Paul on June 6, 2021, which may have fueled EMAX’s 1,300 percent pump-and-dump rally by the end of May 2021.
Celebrities know little about cryptocurrencies
Celebrities usually don’t know anything about cryptocurrencies, and the ones that do are well known in the crypto space. A non-crypto celebrity promoting a crypto project usually means that they were paid to promote the project. Unlike, Elon Musk’s occasional tweets about Dogecoin They were not paid promotions, as Dogecoin does not have a for-profit developer team, and they were done because Musk seems genuinely interested in providing at least some use cases for DOGE.
However, the reality is that most cryptocurrencies do not offer enough utility or intrinsic value to sustain a price surge after receiving a celebrity endorsement. Dogecoin is down 91 percent from its all-time high on May 8, 2021, despite Elon Musk frequently tweeting it, being accepted as payment by Tesla for merchandising, and being the original meme coin. For a cryptocurrency to hold the value it earns, it must be bought and used frequently for its intended purpose, and if buyers aren’t interested in its utility (or if it doesn’t have any), then they have no reason to buy it.
Many celebrities will promote cryptocurrencies to their fans without knowing what they are promoting. It is not uncommon for a celebrity to be paid to promote a cryptocurrency scam, and Pop Culture Crypto Scams they appear all the time even when they are not being promoted. Most legitimate crypto projects do not invest in celebrity endorsement of their cryptocurrencyand instead focus on advertising, investor relations, building a loyal community, and showing progress in achieving your project roadmap.
Next: Will Dogecoin ever hit $1?
Font: Forkast, CoinMarketcap