It’s been a bad few days for celebrities who signed up to endorse crypto. Without losing ourselves in the details, (because there are people who understand this better than me, see here), cryptocurrencies crashed last week leaving some – most prominently Luna – basically worthless. For everyone who decided to invest their money in crypto, this is a devastating development with equally devastating consequences.
So, why are A-listers getting dragged in the aftermath of the great crypto crash? Because they endorsed it. They encouraged consumers, who saw them as trustworthy people, to be bold. They made it normal – no big deal. “Fortune favours the brave,” said Matt Damon in a commercial for Crypto.com, aired during the Superbowl this year, encouraging consumers to join the crypto revolution. Surely Jason Bourne wouldn’t be hawking something that was shady?
Gwyneth Paltrow and Mila Kunis have taken part in online panel events encouraging women to adopt cryptocurrencies and Reese Witherspoon has urged women to make moves to understand the NFT industry. Paltrow has also invested in Moonpay – a FinTech startup which allows consumers to buy and sell crypto easily – along with celebrities such as Kate Hudson, Justin Bieber and Mindy Kaling. Be part of the conversation now, they’ve all said, this is the future.
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However, something they’ve not been paid to do is explain how volatile cryptocurrencies are – something worth considering if you don’t have money to lose. In the now notorious Super Bowl ad, Damon likens crypto investors to world-defining adventurers, explorers and astronauts. Investing in crypto isn’t positioned as a gamble, it’s positioned as brave. While you may not be convinced by someone you happen to stumble across on TikTok saying the same thing, it’s a different ball game when Pepper Potts and Elle Woods are telling you to join them at the table.
This is where celebrity endorsement is infinitely more problematic than influencer marketing, particularly when it comes to emergent areas. While it may feel cool to be part of the same club as Paltrow and Damon when things are going well, the concept of being in it together falls off a cliff when things go wrong. In the crypto crash over the past seven days, people have seen their savings disappear – potentially never to return. This event will change their lives forever. Meanwhile on Instagram, Witherpoon is posting content about her first children’s book.
All of this puts me in the mind of a former colleague who lost everything in the 2008 crash of Iceland’s commercial banks. He was a New Yorker but his brother had told him to put his money there. We sat side-by-side reporting on the crisis which financially ruined him and then he disappeared for three days. On his return I said, “are you mad at your brother?” He replied no way – his brother had lost so much more than him.
My former colleague was able to forgive the person who’d shepherded him to Iceland because in the crash, they remained in the same boat. Can we say this about the celebrities who have encouraged consumers to invest in crypto? No – they are all financially fine. It’s a drop in the ocean to them because none of this is a serious shot at accumulating wealth, it’s a zeitgeisty experiment. While working with big names has a big impact, if things go wrong it will be remembered – and the chances are, not forgiven.
By Sara McCorquodale, CEO and founder of CORQ.