2021 was a notable year in the cryptocurrency industry. As crypto dominated the headlines and gained popularity amongst the people, not only were more people investing, the market went absolutely bonkers. CoinMarketCap data reveals the performances of the top 300 cryptocurrencies by market cap and 85% of top altcoins DOUBLED in value. And meme coins became a craze.
Crypto wasn’t just adopted among the average pop; it also became increasingly popular for influencers and celebrities such as Mila Kunis, Mariah Carey, Tom Brady, Snoop Dogg, Elon Musk, Kim Kardashian, and many more. It’s safe to say that when both Kim Kardashian and Elon Musk involve themselves in the same thing, people are going to pay attention.
Here Are Some Notable Cryptocurrency Moments in Hollywood
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In May, just before Elon Musk’s SNL debut, the price of Dogecoin began to spike and hit an all-time high on the day of his TV appearance. The flux continued as the price quickly retreated shortly after. This instance can be comparable to Dogecoin’s rollercoaster run all year (primarily due to Musk’s influence). But, this wasn’t the only moment that Musk stirred things up. His announcement that Telsa would no longer accept bitcoin caused investors to hit the breaks on the booming market.
Tesla’s profits hit $438 million in the first three months of the year– the most the company has ever seen during a quarter. BUT, nearly a quarter of those profits were due to selling a portion of the company’s stake in Bitcoin. Musk’s announcement erased as much as $365 billion in value from the cryptocurrency market. Wow.
Snoop entered the crypto space via an NFT collaboration named “Decentral Eyes Dogg.”
Paris Hilton also rode the NFT wave in 2021 and claimed to have invested in Bitcoin and Ether (ETH) back when BTC was valued below $1,000.
The former child actor of The Mighty Ducks, Brock Pierce, was the first to take out a Bitocin mortgage. In November of 2018, billionaire Brock Pierce used more than three million in bitcoin to purchase a 1.2 million dollar home in Amsterdam. This is known as the first-ever crypto-backed mortgage.
The legendary Detroit rapper Eminem has jumped into the Bored Ape Yacht Club (BAYC). He purchased one of the Ethereum-based Apes for 123.45 ETH ($452,000) and made the ape his profile picture on Twitter. Meanwhile, he appears to have collected at least 15 NFTs so far on OpenSea under the name Shady_Holdings.
Ashton Kutcher is a longtime fan of blockchain technology. He even tweeted about Ethereum in 2014! He is also an investor in the exchange, “BitBay,” and his firm Sound Ventures is backing Unikrn, an eSports betting platform.
One of the most famous pop stars in history, Justin Bieber collected a slew of minted images by artist Gianpiero.
Kim Kardashian marked her entry into crypto on her official Instagram account by promoting Ethereum Max (EMAX), an untested cryptocurrency token. This came with some backlash. Kim Kardashian, Floyd Mayweather Jr., and Paul Pierce are among several celebrities who are being sued for allegedly leading investors into a cryptocurrency “pump and dump” scam. The celebrities and other defendants are accused of making “false or misleading statements to investors about EthereumMax through social media advertisements and other promotional activities,” according to the class-action complaint filed last Friday in the U.S. District Court for the Central District of California.
In addition to the three celebrities, defendants include the company’s co-founders and others. Ethereum Max is priced at $0.00000002257, according to Coinmarketcap.com. That’s a lot of zeroes. If you bought Ethereum Max after Kardashian pushed it and didn’t sell fast enough, all you were left with was a practically worthless digital asset.
The Psychology of Celebrity Influence
Celebrities and influencers alike play a huge part in societal standards and norms. Celebrities can have a positive influence on youth, serving as role models. Or, they can be unhealthy examples that lead to body image issues, substance use and have other negative effects on teens’ decision making. And, celebs not only affect the minds of the young and all ages. If you’ve heard of the “celebrity effect,” you are familiar with this phenomenon.
The celebrity effect is the ability of famous people to influence others’ lives. Companies that take advantage of someone’s star power and influence to boost their own products and services have known this for years. Celebrities can add credibility and glamour to any brand or dismantle the brand’s image when associated with negative PR. It’s a simple psychological effect. Subconsciously, people believe that purchasing a product or service that’s promoted by a celebrity they admire will allow them to emulate the celebrity’s desired traits or attract similar people into their lives. Consumers associate the celebrities’ success, beauty, athletic skill, etc., with the brand/product/service.
“People are prone to celebrity influence if they have strong feelings of attachment toward a celebrity. Previous research has demonstrated that intense attachments can result if celebrities are responsive to people’s needs for autonomy, relatedness, and competence.”
Is Celebrity Influence a Cause For Concern For Investors?
As mentioned earlier in the article, celebrity crypto endorsers like Kim Kardashian are sparking concern amongst investors. Lawrence Cunningham, a law professor at The George Washington University, and Cleve Mesidor, a public policy adviser at the Blockchain Association, spoke on the topic in recent interviews.
Cunningham made points such as, “There is excitement for crypto, but a lot of it is speculative, and celebrities are amplifying that. This part of the enthusiasm, this star power, exacerbates an otherwise spontaneous social phenomenon. Some celebrities have experience in crypto, but many do not.”
“Education is key,” said Cleve Mesidor. “Cryptocurrencies were created by ‘cypherpunks, libertarians, people of color who wanted to have economic freedom. It was misfits who came together and created this thing. As it has grown and becomes more mainstream, wealthy players are injecting themselves into the narrative, but they don’t understand crypto.”
Things To Consider Before Taking Investing Advice From a Celeb/Influencer:
Celebrities don’t know or care about you. They are more likely looking to boost their net worth or have an ulterior agenda.
DO YOUR OWN RESEARCH. There are too many scams that give the crypto industry a bad name. Before investing, understand what you’re opting into and how this can affect your financial standings.
Some celebrities don’t know what they’re talking about and/or have little experience.
The riskiest crypto products have no white paper or real business purpose.
Do not fall prey to hyped-up “strategies” from those uneducated on the subject.
No two investors are alike.
Crypto is an unregulated instrument; therefore, it holds no recourse if things go wrong.
Don’t try to make a “quick buck.” Understand the risk-reward acceptance level.
The Key Takeaway
Watching famous personalities with huge fan bases trigger their followers into investing in risky assets without talking about the risk is incredibly disheartening. It’s important to invest responsibly and make decisions for yourself regarding your financial standing. But, with all of the celebrities jumping on board, who’s to say crypto is going to take-off faster than ever before.