Celebrities are frequently paid to promote cryptocurrency projects, many of which lose most/all of their value or turn out to be scams. Whether it’s some obscure cryptocurrency or yet another expensive JPEG NFT collection, very few celebrities should be trusted for crypto endorsements.

Celebrities endorsing crypto projects is not a new practice, and people getting wrecked by celebrity-endorsed cryptocurrencies and NFT projects is also not new. During the 2021-2022 crypto bull-run, many celebrities were paid for promotional material, such as the Larry David Super Bowl ad or Matt Damon’s commercial for Crypto.com. New crypto projects frequently allocate a budget for marketing, and will pay crypto influencers to promote their cryptocurrency to retail crypto investors looking for the next “100x altcoin gem.

However, celebrities are not typically paid by serious projects to promote their token, as it is more efficient and affordable to pay for advertisements and crypto influencers. Celebrity endorsements almost always result in a ‘pump and dump’ crypto scam that wrecks the project. For example, Forkast reported on Kim Kardashian’s $1.26M fine by the SEC for failing to disclose a $250,000 fee to promote the EthereumMax (EMAX) cryptocurrency on her Instagram in mid-June 2021. CoinMarketcap’s price history for EMAX shows the price of EMAX is down almost 70 percent since Kardashian’s promotion, which means that every Kim Kardashian fan who bought EMAX lost most of what they invested in. EMAX was also advertised by boxer Floyd Mayweather and was the only cryptocurrency accepted as payment for his fight against Logan Paul on June 6, 2021, which may have driven EMAX’s 1,300 percent pump and dump rally for the end of May 2021.

Celebrities Know Little About Crypto

Blue foggy background, EthereumMax logo center, Floyd Mayweather wearing EthereumMax shirt on left, Kim Kardashian on right, EMAX chart overlayed

Celebrities don’t typically know anything about cryptocurrency, and those who do are well-known in the crypto space. A non-crypto celebrity promoting a crypto project usually means they were paid to promote the project. In contrast, Elon Musk’s occasional tweets about Dogecoin were not paid promotions, as Dogecoin has no for-profit developer team, and were made because Musk appears to be genuinely interested in providing at least some use cases for DOGE.

However, the reality is that most cryptocurrencies do not offer enough utility or intrinsic value to sustain a price pump after receiving a celebrity endorsement. Dogecoin is down 91 percent from its all-time-high on May 8, 2021, despite being frequently tweeted about by Elon Musk, being accepted as payment by Tesla for merch, and being the original meme coin. For a cryptocurrency to hold the value it gains, it needs to be frequently bought and used for its intended purpose, and if buyers are not interested in its utility (or if it has none) then they have no reason to buy it.

Many celebrities will promote cryptocurrencies to their fans without knowing what it is they are promoting. It isn’t uncommon for a celebrity to be paid to promote a cryptocurrency scam, and pop culture crypto scams appear all the time even when they are not being promoted. Most legitimate crypto projects do not invest in celebrity endorsements of their cryptocurrency, and instead focus on advertising, investor relations, building a loyal community, and showing progress in the achievement of their project roadmap.

Next: Will Dogecoin Ever Reach $1?

Source: Forkast, CoinMarketcap