The values of cryptocurrencies like bitcoin and ethereum have plunged in recent months. And with the crash, some celebrities who advertised cryptocurrencies have come under fire for encouraging people to invest in them.
Emily Stewartsenior correspondent at Vox, writing about the relationship between celebrities and financial products and services. She spoke with “Marketplace” host Kai Ryssdal about the endorsement relationship. The following is an edited transcript of their conversation.
Kai Rysdal: Celebrities approve of things all the time. Why is this money trust relationship different?
Emily Stewart: Well, I think it’s one thing if a celebrity tells you to buy a bag of chips, isn’t it? You don’t like fries, they’re disgusting, okay. But when it’s your money, it’s a bit of a different story. These are obviously a bit higher stakes than the chips you don’t like.
Rysdal: Can we talk specifically about crypto then, which is the thing that honestly, you know, back during the Super Bowl and Matt Damon and “Fortune favors the brave” and all that. And now crypto is crashing and I’m going, “How are you feeling now, Matt Damon?” He’s probably not too worried about it, but people who bought crypto because Matt Damon said fortune favors the brave are out of luck.
Stewart: Right. I mean, I think it goes without saying, you know, it’s not always a good idea to follow celebrities in any investment. Celebrities are rich, for reasons that have nothing to do with their crypto investments. Whether it’s Reese Witherspoon or Tom Brady or Larry David, I’d venture to guess that these people have investment managers who probably tell them not to do a ton of crypto. But, you know, we really saw, I think, at the beginning of the year and at the end of last year, a ton of celebrities really getting into crypto. And it’s really kind of built-in crypto in a way that I thought was a little different. And I think a lot of people, you know, got really excited and kind of didn’t realize that crypto has historically gone through these boom and bust cycles. And right now, we’re in a bit of a crypto winter, I guess.
Rysdal: Does it work? I mean, is Tom Brady doing what that weird plugin ad was, I can’t even remember, but is it getting people to buy crypto?
Stewart: I mean, it’s hard to say. You know, Morning Consult did a investigation which revealed that around 20% of investors and 45% of crypto owners said they would invest in cryptocurrency if famous people endorsed it. It was behind financial advisors and family members or business reporters. But it’s not nobody. And I think more broadly, as I said before, there’s this integration. Like maybe I didn’t see Tom Brady’s ad or Larry David’s ad and then I bought bitcoin or whatever. But it kind of puts him more in the water stream in a way that maybe I’m starting to think about.
Rysdal: So listen, the first time I heard about this ad from Matt Damon – which, you know, a lot of Super Bowl ads come out, you know, a day or two in advance, whatever – but even If you haven’t watched the Super Bowl, you’ve seen that Matt Damon “fortune smiles on the brave” ad somewhere in your social feed. And that must be the multiplier.
Stewart: Right. That’s the thing, it’s all over the place. And you see this stuff all the time, or maybe, you know, it’s not just one ad you’ve seen, but it just fits in there. Even last year I had friends who never asked me anything about investing suddenly saying, like, “Hey, but I need to make some quick money . Do you think I should get into crypto? And the answer is absolutely not. And if you’re asking me, it’s way too late.
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