Retail traders were not the only ones to get burnt in the crypto bear market. A number of celebrities also dabbled in the asset class with endorsements in 2022 that led to lawsuits and losses.
Crypto markets have retreated 72.5% since their peak levels in late 2021 in their fourth bear cycle. Those that bought near to or at the top would have suffered major losses selling in the latter half of this year.
According to Bloomberg, most of the celebrities that have endorsed or dabbled in digital assets have come away with burnt fingers. The difference is that they can afford it whilst retail traders are more likely to suffer after financial losses.
Another issue is that celebrities are often seen as influencers, so throwing their weight behind something can have an even bigger impact.
Celebrities and Crypto Failures
One of the first major celebrities to endorse crypto was actor Matt Damon in late 2021. His campaign for the Crypto.com exchange came at a time when markets were near their cycle peak. Crypto prices have dumped more than 70% since the advertisements were aired.
‘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 those prices at the time were not. Additionally, her media company, Hello Sunshine, collaborated with the World of Women NFT collective in February. Since then, the NFT prices have slumped more than 75%.
There have been a number of high-profile sports personalities endorsing crypto over the past year or so. Boxing champion Mike Tyson launched his own NFT collection in 2021. However, prices for the tokens have now tanked more than 90%.
Seven-time Super Bowl-winning quarterback Tom Brady famously endorsed the FTX exchange last year. We all know what happened to FTX in November. Fellow superstar athletes Steph Curry and Naomi Osaka also formed partnerships with FTX. They have since seen the wrath of securities regulators for potential law violations.
In March, Paris Hilton collaborated with the metaverse platform The Sandbox with a celebrity DJ performance. Interest in the platform has since plummeted along with its SAND token price.
Celebrity socialite Kim Kardashian found herself at the wrong end of a lawsuit in January for promoting the alleged crypto scam EthereumMax on her Instagram account.
The List Goes On …
In August, NFL quarterback Patrick Mahomes became the celebrity face of Dapper Labs’ new NFT platform. The bottom appears to have fallen out of NFT markets, with sales volume slumping as much as 90% this year.
Billionaire investor Mark Cuban touted his efforts to make money as a liquidity provider using the TITAN token in 2021. The IRON Titanium Token crashed 100% to zero shortly after, with Cuban admitting, “I got hit like everyone else.”
Finally, Elon Musk has also been highly influential in crypto markets, especially Dogecoin (DOGE). His repeated tweets and surreptitious shilling sent DOGE to an all-time high of $0.731 in May 2021. The coin has since crashed 90% from that lofty peak, trading at $0.075 today.
The moral of the story is don’t listen to celebrities or influencers and do carry out your own crypto research.
BeInCrypto has reached out to company or individual involved in the story to get an official statement about the recent developments, but it has yet to hear back.