Retail traders were not the only ones who suffered losses during the crypto bear market. In 2022, a number of celebrities dabbled in the asset class with endorsements, which resulted in lawsuits and losses.
In their fourth bear cycle, cryptocurrency markets have retreated 72.5% since their peak levels in late 2021. Those who bought near or at the top would have suffered significant losses if they sold in the second half of this year.
According to Bloomberg, the majority of celebrities who have endorsed or dabbled in digital assets have burned their fingers. The distinction is that they can afford it, whereas retail traders are more likely to suffer as a result of financial losses.
Another issue is that celebrities are frequently viewed as influencers, so lending their support to something can have an even greater impact.
In late 2021, actor Matt Damon was one of the first major celebrities to endorse cryptocurrency. His Crypto.com exchange campaign came at a time when markets were nearing their cycle peak. Since the advertisements aired, cryptocurrency prices have dropped by more than 70%.
‘Legally Blonde’ actress Reese Witherspoon tweeted that “crypto was here to stay” in December last year. She was correct; crypto was here to stay, but not at those prices. In addition, in February, her media company, Hello Sunshine, collaborated with the World of Women NFT collective. NFT prices have fallen by more than 75% since then.
Over the last year or so, a number of high-profile sports figures have endorsed cryptocurrency. Mike Tyson, the boxing champion, will launch his own NFT collection in 2021. However, the tokens’ prices have now dropped by more than 90%.
Last year, seven-time Super Bowl champion Tom Brady famously endorsed the FTX exchange. We’ve all heard about what happened to FTX in November. Steph Curry and Naomi Osaka, two other superstar athletes, have also joined forces with FTX. Since then, they have faced the wrath of securities regulators for potential law violations.
Paris Hilton performed a celebrity DJ set for the metaverse platform The Sandbox in March. Since then, interest in the platform has waned, as has the value of its SAND token.
Kim Kardashian, a celebrity socialite, was sued in January for promoting the alleged cryptocurrency scam EthereumMax on her Instagram account.
NFL quarterback Patrick Mahomes was named the celebrity face of Dapper Labs’ new NFT platform in August. The bottom appears to have dropped out of the NFT markets, with sales volume falling by up to 90% this year.
Billionaire investor Mark Cuban touted his efforts to profit as a liquidity provider in 2021 using the TITAN token. Soon after, the IRON Titanium Token crashed to zero, with Cuban admitting, “I got hit like everyone else.”
Finally, Elon Musk has had a significant impact on the cryptocurrency market, particularly Dogecoin (DOGE). His frequent tweets and covert shilling propelled DOGE to an all-time high of $0.731 in May 2021. The coin has since dropped 90% from its high, trading at $0.075 today.
The moral of the story is to ignore celebrities and influencers and conduct your own crypto research.
