Cryptocurrency Market Collapse | Celebrities are more discreet

In the latest advertisement from the virtual currency exchange site Crypto.com, titled Bravery Is a Processstar basketball player Joel Embiid strolls through Philadelphia while Bill Self, his former college coach, narrates.

“Even when our path didn’t make sense to everyone, we kept going,” Self says in the ad, which debuted May 6. “We continue, until our path is the one they would have liked to take. »

What the ad doesn’t say: The cryptocurrency market is in the midst of a meltdown. Buyers beware.

The enthusiasm of Hollywood celebrities and top athletes for crypto has peaked over the past year. On social media, in interviews and even in music videos, they have portrayed virtual currency as a world with its own culture and philosophy, more open than traditional finance and offering the opportunity to earn a lot silver.

The Super Bowl has in fact been dubbed the Crypto Bowl this year due to the sheer number of commercials – costing up to $7 million for 30 seconds – showcasing the industry, including several featuring celebrities.

But after investors watched hundreds of billions of dollars vanish in this month’s sharp fall in prices, these famous promoters are now facing growing criticism that they helped push admirers vulnerable to investing in cryptocurrencies without highlighting the risks. Unlike clothes, snacks or many other products sold by stars, the cryptocurrency market is volatile and full of scams.

“It’s real money that people invest,” said Giovanni Compiani, an assistant professor of marketing at the University of Chicago, whose research has shown that younger, lower-income investors tend to be too optimistic about the trajectory of the crypto. “Those promoting it should be more upfront about the potential downsides. »

Radio silence…

So far, celebrities promoting crypto have remained largely silent on whether they had any doubts about their promotions.

Crypto.com declined to make Joel Embiid available for interview comment on his partnership with the company. Matt Damon, who compared the advent of virtual currency to the development of aviation and spaceflight in a criticized but widely circulated Crypto.com ad last year, did not respond to interview requests. . No response either from basketball star LeBron James, who appeared in the company’s Super Bowl ad this year.

Oscar winner Reese Witherspoon, who said online in December that “crypto is here to stay,” did not respond to a request for comment. Neither is Gwyneth Paltrow, another Oscar winner, who lent her name to a contest offering bitcoins as prizes late last year.

Paris Hilton, who has nearly 17 million Twitter followers who watch her coo about her two dogs named Crypto and Ether, did not respond to a request for comment. The same goes for several other famous “cryptopromoters”, such as Mila Kunis, Aaron Rodgers and Tom Brady. A representative for Naomi Osaka, the tennis star who became an ambassador for cryptocurrency exchange FTX this year, wrote in an email that “unfortunately she is overseas and not available.”

“We have no idea how cryptocurrencies work…”

In FTX’s Super Bowl commercial, comedian Larry David disparaged important inventions like the wheel and the light bulb before dismissing crypto. The ad invited viewers, with a wink: “Don’t be like Larry. »

Jeff Schaffer, director of the Super Bowl commercial, said in an email that he and David had no comment on the market crash.

“Unfortunately, I don’t think we would have anything to add, as we have no idea how cryptocurrencies work (even after it was explained to us many times), we don’t own any and we don’t follow his market,” he said.

The responsibility of the stars

The instability of cryptocurrencies highlights a fundamental error in celebrity marketing: the support of a famous person can be remembered – actor John Houseman’s advertisements for investment firm Smith Barney decades ago have gone down in Madison Avenue legend – but that doesn’t make the advertised product inherently worth trying.

“That’s what they do — they’re celebrities, they’ve been offered money to promote something that’s promising,” said Beth Egan, associate professor of advertising at Syracuse University. .

But it was not without risk, added M.^me Egan. If the cryptocurrency industry had continued to thrive – or if it regained its high-flying status – the promoters might be praised. But if the fall continues, their reputation could suffer.

“If I were Matt Damon or Reese Witherspoon, I would question my willingness to accept this kind of contract,” she said.

This article was originally published in The New York Times.