By Anushree Dave
Celebrity-endorsed digital assets saw a lot of hype in the past year, and sometimes temporarily boosted the price. But many haven’t performed well overtime.
Matt Damon made headlines and drew criticism when he starred in an ad for cryptocurrency exchange Crypto.com a year ago. Since then, the prices of many cryptocurrencies have dropped significantly. The market capitalization of crypto assets has dropped below $1 trillion from a November 2021 peak of $3 trillion.
But Damon’s isn’t the only one celebrity crypto endorsement that made headlines this past year. Last week, Kim Kardashian drew attention for getting a $1.26 million fine for touting crypto on her Instagram last year without disclosing a payment from the issuer.
See: As Kim Kardashian is fined by the SEC, law professor says it’s ‘easy to convince people’ to buy crypto
Other stars launched non-fungible token art collections, partnered with large crypto companies like FTX and Gemini, or purchased NFT art from a popular collection. Here’s a look at how celebrity-endorsed cryptocurrencies and NFT projects have performed over time.
Matt Damon: Matt Damon first appeared in a Crypto.com ad in October 2021. The price of Bitcoin has dropped significantly since then, down from around $60,000 in October 2021 to just under $20,000 in October 2022, over a 60% drop. At the time of Damon’s endorsement, Bitcoin had a market cap of $1.14 trillion. Right now, it’s at $382 billion.
Crypto.com and Matt Damon’s agent did not respond to requests for comment.
Reese Witherspoon: Reese Witherspoon tweeted out her World of Women non-fungible token in March 2022. Witherspoon’s media company Hello Sunshine had formed a partnership in February to promote the WoW collection. At the time of Witherspoon’s tweet, the floor price of a WoW NFT peaked at 12.8 ETH, or roughly $17,135. The floor price is the lowest price you can buy an NFT from a particular collection. The floor price of the collection at the time of reporting this sits at 2.35 ETH or roughly $3000, over an 80% drop.
Hello Sunshine did not respond to a request for comment.
Gwyneth Paltrow: Gwyneth Paltrow announced joining the Bored Ape Yacht Club, a collection of non-fungible token art, at the end of January. The floor price was 88 ETH or around $118,000. The collection’s floor price peaked at the end of April, when it was 144.9 ETH, or $195,000. Right now, the floor price is 76 ETH or $100,000, an 18% decrease.
There was no immediate response to requests for comment left with Paltrow’s Goop and My BFF.
Charli D’Amelio: The TikTok star, who was once one of the most followed on the platform, worked with cryptocurrency exchange Gemini to mention Bitcoin on the family’s Instagram page in May 2021. At the time, Bitcoin’s average closing price was $46,620, compared to the $20,000 now, over a 55% drop.
D’Amelio’s agent did not respond to request for comment.
Kim Kardashian: Kardashian first promoted a cryptocurrency token called EthereumMAX in June 2021 on her Instagram page, which had 210 million followers at the time, and drew the fine from the SEC. EthereumMAX — not related to Ethereum — had a price of 0.00000023 on June 12. The price at the time of reporting is 0.000000005973, which is over a 95% drop.
Kardashian’s attorney didn’t respond to a request for comment.
Tom Brady: Tom Brady formed a partnership with crypto exchange FTX back in June 2021. Other athletes, including Steph Curry and Naomi Osaka, have also formed partnerships with FTX. In June 2021, the closing price for Bitcoin was $35,127 compared to around $20,000 now, a drop of 43%.
FTX didn’t immediately respond to a request for comment.
Mike Tyson: Mike Tyson released an NFT collection in August 2021. An NFT from the collection had an average price of 0.49 ETH upon release, according to OpenSea data. The collection peaked in September 2021 with a price of 14.11 ETH. Currently, the average price is listed as 0.1 ETH, a drop of 75% since its initial launch.
Mike Tyson’s agent didn’t respond to request for comment.
While it’s not always the case that information provided by a celebrity or influencer is “poor advice or flat out incorrect,” said Kevin M. Williams, investment advisor representative at Full Life Financial Planning in Pembroke Mass., he wouldn’t advise his clients to rely on it.
“What [celebrities] are investing is, likely, a very small portion of their total portfolio. Being a Boston sports fan, I know how much Tom Brady hates to lose anything, but he can afford to take a major hit if he makes a bad bet on Ethereum. Can the average investor?” he said.
Projects that are crypto-based are even more unreliable, because the landscape is “changing by the hour,” said Williams.
When turning to the internet to look for financial advice, it’s best to look at credentials — including Chartered Financial Analyst, Chartered Alternative Investment Analyst, said Catherine Valega, a wealth consultant at Green Bee Advisory in Boston.
This is not always guaranteed to provide good financial advice, since they don’t know your personal financial situation. “But at least it provides some comfort that they have studied, trained, or worked in the industry they are advising on,” Valega said.
(END) Dow Jones Newswires
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