Why Do Celebrities Turn to Crypto? History and Psychology

Cryptocurrency is the currency of the people, and while that includes everyday investors, it also applies to hot-shot celebrities.

Seeing a world-famous celebrity being linked to a new memecoin or an exchange isn’t exactly anything new, as anyone who keeps up with the crypto ecosystem will know all too well. 

Many will argue that most celebrities will only do this for self-profit, and while this is certainly true in some cases, the reasons why they get involved with crypto aren’t always this obvious.

Celebrities can promote crypto in one of two ways: by establishing their custom-made token or advertising another token or exchange they are partnered with.

Of course, these popular individuals can promote the product in many ways. Whether it be an Instagram story, a livestream, a concert, or even a simple Tweet, any mention of cryptocurrency by a celebrity is always bound to draw attention.

It’s also important to mention that there’s no restriction on what celebrities can enter the cryptocurrency world. Actors, musicians, and athletes have all taken the plunge into crypto, which proves just how accessible it is.

History of Celebrities in Crypto

Before we analyze why celebrities decided to promote their crypto of choice, let’s first look at how this strange relationship formed. 

The First Celebrity Token

During a 2019 free concert in Manila, famed boxer Manny Pacquiao surprised everyone when he unveiled the first celebrity crypto token: PAC.

The PAC was designed to allow Manny’s fans to “interact” with him in unique ways by giving them a new way to buy merchandise and tickets for his fights.

Though there were some examples of celebrities supporting crypto products before this, such as Mike Tyson, who promoted a Bitcoin Wallet in 2016, none of them received the widespread attention that Pacquaio did.

Only a short while later, singer Jason Derulo and tennis player Caroline Wozniacki also created their own tokens. 

At this point, celebrities seemed to be genuine about using crypto to build a bridge between them and their fans, but this didn’t appear to last for long. 

Matt Damon Advert

In October 2021, movie star Matt Damon randomly appeared in a now-infamous advertisement for Crypto.com.

Throughout the minute-long video, Damon only subtly references crypto before ending with the bombshell statement, “Fortune favors the brave,” which implies that only “brave” people would be willing to partake in crypto investments. 

Damon’s baffling advertisement received a lot of flak. It was berated on social media and even spoofed by Stephen Colbert. 

Despite the backlash, Lebron James appeared in a Crypto.com advertisement at the Super Bowl just months later.

The fearsome criticism both received showed that people were beginning to get sick of celebrities telling them to invest in crypto, especially when doing so should always be done with care and consideration. However, it was also clear celebrities were getting something from it since they continued appearing in ads. 

Kim Kardashian Lawsuit

Another important scenario that molded the popular opinion of celebrities in crypto was the 2022 Kim Kardashian lawsuit. The popular social media influencer posted an Instagram story promoting an obscure token called “EMAX” to her 360+ million followers.

Though the post claims not to be “Financial advice,” it also suggests that ” a few minutes ago, Ethereum MAX burned 400 trillion tokens” and that it was ready to start giving back to the community.

Inevitably, EMAX turned out to be a dud and tanked more than 97% just a week after the post was made. As a result, Kardashian, Floyd Mayweather, and Paul Pierce, who were also involved, were fined by the Securities and Exchange Commission (SEC).

What’s important to note here is that there were plenty of red flags that EMAX wasn’t legitimate. It had no relation to the Ethereum (ETH) blockchain despite Its saying otherwise, and no white paper was produced to set out the token’s plans and development history.

Clearly, Kim Kardashian hadn’t conducted the necessary research to check whether this was legit, which caused a huge blow to the reputations of celebrities involved in crypto. 

“Celebrities Aren’t Crypto Experts”

2022 and 2023 saw an abundance of lawsuits, scandals, and controversies relating to celebrities within the crypto world.

The biggest example was the FTX debacle, in which the popular cryptocurrency exchange collapsed not long after several well-known celebrities promoted it. Stephen Curry, Naomi Osaka, Gisele Bundchen, and Tom Brady were just a few of the names associated with the dodgy exchange.

Because the celebrities refused to reveal how much they were paid for the whole ordeal, they were punished with hefty fines.

Another well-known incident concerned professional football player Cristiano Ronaldo, who decided to sell a collection of CR7 NFTs. The cheapest NFT at the time of release was $77, and a year later, it dropped to a single dollar. Ronaldo also refused to share his earnings from the promotion.

Ironically, one of the FTX advertisements made it clear that “Stephen Curry is not a crypto expert,” and at this point, people were led to believe that this applied to more or less all celebrities. 

Modern Day 

Despite all the lawsuits and controversies, celebrities still participate in the crypto landscape for their own reasons.

However, people tend to be more skeptical of celebrity tokens and promotions. Alongside the turbulent history of celebrities in crypto, there are a few other reasons why this distrust has occurred:

• Celebrity Tokens are Memecoins: Memcoins often rise in value initially but drop off soon after. Since celebrity tokens are memecoins, they aren’t usually viable long-term.
• Lack of Underlying Technology: Celebrity tokens often lack an underlying tech that gives them extra use cases and features, but this doesn’t often apply to celebrity tokens.
• Manipulating the Market: Investors know celebrities can easily manipulate the market, sometimes for their own gain, which causes them to hesitate to support them.

Reasons Why Celebrities Turn to Crypto

So, it’s obvious that celebrities are drawn to crypto like moths to a flame, but the exact reasoning behind their interactions with it isn’t always as clear.

Donations 

If a celebrity has an organization they’re sponsoring, they can raise more money through crypto promotions.

Despite the criticism he received, Matt Damon revealed in 2023 that his Crypto.com advertisement was done in order to raise money for Water.org. In the end, he managed to raise a whopping $1 million which shows just how beneficial crypto can be when used responsibly.

Fan Support 

Many celebrities claim to use cryptocurrency to give back to fans, though this has been met with controversy.

For example, GCOX, the company behind Manny Pacquaio’s Pac token, claimed it wanted to “Revolutionize the way celebrities interact with their fans, giving the public unparalleled access to celebrities.”

Ronaldo repeated the sentiment with his short-lived NFT collection though which he said was designed to reward fans “For all the years of support”.

Many have criticized that this approach turns popularity itself into an object of exchange, though admittedly, this intent has been rarely seen in recent years as celebrities focus more on wealth and reputation. 

Avoiding Scams

Dodging scams is something everyday crypto investors do on a regular basis, but this also applies to celebs, albeit, on a larger scale.

The main concern is bad actors who will use a celebrity’s name and face to try and sell a token. Sahil Arora is a culprit who has done this with celebrities like rappers Rich the Kid and, more recently, Iggy Azalea.

When asked in an interview why Azalea launched her “MOTHER” token, she claimed that she initially planned to do it much later but was forced to release it right after Sahil’s scam token to push back and “save” her reputation.

Artificial Promotions

Celebrities can get roped in to promote a token or exchange under the false belief that it’s legitimate.

EMAX and FDX are the primary examples of this, where celebrities failed to conduct the necessary research to understand that these promotions were obscure and unreliable.

This is most often the case with “pump and dump” tokens, which, as the name implies, are designed to make a quick sum of profit before being tossed away.

Impact of Celebrities on Cryptocurrency

Regardless of intent, celebrity endorsements will always impact the crypto market.

Let’s take Lionel Messi, arguably one of the most popular human beings on the planet, and his promotion of the WATER token in July 2024. Despite WATER being a niche token nobody had heard of, its value shot up by 350% just two hours after the announcement, showing how much power celebrities truly possess in the crypto landscape.

We can learn more about this phenomenon from psychology author Jeff Stibel. According to Stibel, humans were programmed to register faces as being either friends or foes back when we were living in caves.

In modern times, our brain recognizes celebrities as “friends” since we often see them playing out good guys on-screen. As a result, when they promote something, we usually take their word for it.

However, a select few celebrities have had an especially big effect on the value and recognition of cryptocurrency.

Elon Musk

No celebrity has impacted the crypto markets as much as Elon Musk.

It all began when Musk mentioned Bitcoin (BTC) at the 2014 Vanity Fair New Establishment Summit, claiming it was “probably a good thing.” However, he also admitted in a 2019 podcast that Bitcoin would never be used as a form of payment for TESLA products. 

Instead, Dogecoin (DOGE) became the token Musk would eventually incorporate into TESLA after supporting it through numerous memes and tweets. Each time Musk claimed Dogecoin was his “favorite” crypto asset, or when he changed the Twitter logo to Doge, the token’s value skyrocketed.

Musk’s influence on crypto markets has been a subject of fierce debate, but it’s nonetheless caused many investors to hang on to his every word to capitalize on the publicity he provides.

Presidents

Presidents are ultimately the most important regulators of crypto, so their opinions are highly important.

Obama was the first to speak about crypto. In 2014, he compared owning Bitcoin to “Having a Swiss bank account in your pocket” which sparked debates on whether he was promoting or denouncing cryptocurrency. 

Donald Trump, on the other hand, was a staunch critic of crypto during his first term, stating, “I am not a fan of Bitcoin and other cryptocurrencies, which are not money and whose value is based on thin air.”

Fast forward to the 2024 election though, and Trump has done a complete 180, appearing at the Bitcoin conference and claiming that “If crypto is going to define the future, I want it to be mined, minted and made in the USA”.

In turn, Trump has received plenty of recognition from crypto developers, including the Winklevoss twins, who donated $1 million to his campaign.

It is unclear why his opinion changed, whether it was purely for votes or because he may have seen the potential in a decentralized form of digital assets for the American people.

On the Flipside

• It’s been repeatedly proven that celebrities usually can’t be trusted when promoting any crypto.
• Therefore, serious investors should stick to more well-known and established tokens and markets rather than join the latest celebrity crypto hype train.

Why This Matters

Celebrities will always be linked to crypto, so rather than asking whether there’ll be more of them, we should focus more on why they keep getting involved. As we’ve seen, there are more reasons than one, and therefore, taking the time to learn the intent behind their actions can help you decide whether to support them.

FAQs