Hollywood’s glitterati … they’re just like us! They eat food, go out for ice cream, and invest in crytpo. Unfortunately, that’s where the comparison ends. Most of us are not rich and famous enough to lean on our celebrity status to fuel these outlays.
Matt Damon’s lucrative crypto.com endorsement to recite Latin proverbs like, “Fortune favors the brave,” and Reese Witherspoon’s January 11 advisory to get with the times and plan for our digital lives are turning into online fodder in early 2022. Some stars have even broken securities laws (hello Kim Kardashian!) as they encourage ill-informed investors to jump into the speculative digital product pool.
Not only do celebrity cryptocurrency promotions motivate people to plunge into investments where they can easily hemorrhage losses, they’re banking on their fame to potentially earn a quick fortune themselves while the regular Joe may not be able to afford losing 50% of their investment in 12 weeks.
Bitcoin, for example, the world’s largest cryptocurrency by market value and therefore the most ‘stable’ cryptocurrency, closed out a rough January 2022. Bitcoin’s value dipped by half in less than three months, falling to as low as $33,000 from a record of almost $69,000. This is the coinage’s worst start to a year since 2018’s “crypto winter” when the digital money dropped by 80% in value.
As the Fed continues to raise rates to combat inflation, it hit the entire crypto ecosystem, from meme coins to crypto exchanges. Ethereum was also down 35% from its previous apex on January 20.
In the (near) future, every person will have a parallel digital identity. Avatars, crypto wallets, digital goods will be the norm. Are you planning for this?
— Reese Witherspoon (@ReeseW) January 11, 2022
This roller coaster may be fun on the way up, but can cause people to lose cars, homes, and investment in higher education when it’s not taken on responsibly. This explains why Witherspoon’s tweet earned backlash and illuminates the reason Damon was mocked for promoting irresponsible behavior amidst their fans. At least The Martian star didn’t resort to outright fraud.
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In 2018, boxer Floyd Mayweather Jr. tweeted that “You can call me Floyd Crypto Mayweather from now on,” after promoting Centra Tech Inc., a company that marketed itself as a debit card provider that allowed cryptocurrency purchases at any businesses accepting Visa and MasterCard.
The Securities and Exchange Commission, however, found that Mayweather failed to disclose promotional payments from three initial coin offerings, including $100,000 from Centra Tech Inc. Along the way music producer Khaled Khaled, aka DJ Khaled, failed to disclose a $50,000 payment from Centra Tech, which he touted on his social media accounts as a “Game changer.” Each music star was fined (Mayweather over $600,000 and Khaled over $150,000), but they did avoid prison, where the founders of Centra ended up after their company was found to be utterly fabricated.
You can call me Floyd Crypto Mayweather from now on #HubiiNetwork #ICO starts tomorrow! Smart contracts for sports?! #CryptoMediaGroup #ad🤑 pic.twitter.com/25GoMPuS7r
— Floyd Mayweather (@FloydMayweather) August 23, 2017
Even when they’re apparently doing something good, celebrities have shown themselves willing to try and make a few million bucks off of the action. Academy Award-winning actress and Goop founder Gwyneth Paltrow participated in a $200 million debt and equity financing round for TeraWulf, a crypto mining company that aspired to unearth Bitcoin using zero-carbon energy. She celebrated this investment in December with a humblebrag $500,000 Bitcoin giveaway to her 2.7 million Twitter followers.
“Buying crypto has often felt exclusionary. In order to democratize who can participate, @CashApp is now making it easy to gift Bitcoin. I’m giving out $500k worth of Bitcoin for the holidays.”
There’s no word on who won, or how much CashApp paid Paltrow to tweet about them, but she wasn’t the first.
Fame and money are both lures and together, can become barbed hooks among those desperate for a life of ease and freedom from financial worry. Investment has proven to be a tried and true way to build wealth. It’s also always been a route to catastrophic losses. The lesson remains the same, as we find from another Roman saying, this from Marcus Aurelius’ Meditations.
“You have power over your mind — not outside events. Realize this, and you will find strength.”
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