In the latest commercial from the virtual currency exchange, Crypto.com, titled “Bravery Is a Process,” star Joel Embiid walks through Philadelphia while Bill Self, his former college coach, lends the narration.
“Even when our path didn’t make sense to everyone else, we kept going,” Mr. Self says in the ad, which made its debut on May 6. “We keep going, until our path is the one they wish they’d taken.”
What the ad doesn’t say: The crypto market is in the middle of a meltdown. Buyers beware.
Enthusiasm for crypto from Hollywood celebrities and top athletes reached a fever pitch over the past year. On social media, during interviews and even in music videos, they portrayed virtual currency as a world with its own hip culture and philosophy – one that was more inclusive than traditional finance and related to make loads of money.
The Super Bowl was nicknamed the “Crypto Bowl” this year because of so many ads – which cost as much as $ 7 million for 30 seconds – featuring the industry, several of them starring boldface names.
But after investors watched hundreds of billions of dollars disappear in a sell-off this month, those famous boosters now face intensifying criticism that they helped drive vulnerable fans into investing in crypto without emphasizing the risks. Unlike clothes or snacks or many other products hawked by celebrities, the crypto market is volatile and rife with scams.
“This is real money that people are investing in,” said Giovanni Compiani, an assistant professor of marketing at the University of Chicago whose research has found that younger, lower-income investors tend to be overly optimistic about crypto’s trajectory. “Those who promote it should be more upfront about the potential downsides.”
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So far, crypto’s celebrity boosters have been largely silent about whether they have any second thoughts about their promotions.
Crypto.com declined to make Mr. Embiid is available to discuss its partnership with the company. Matt Damon, who compared the advent of virtual money to the development of aviation and spaceflight, was critically panned but widely seen at Crypto.com ad last year, not responding to requests. No word either from the basketball star LeBron James, who was featured in the company’s Super Bowl commercial this year.
Reese Witherspoon, an Oscar winner who announced in December that “crypto is here to stay”, did not respond to a request for comment. Neither did Gwyneth Paltrow, another Oscar winner, who lent her name to a Bitcoin giveaway late last year.
Paris Hilton, who has more than 17 million followers on Twitter who watch her coo over her lap dogs Crypto and Ether, stayed mum. Several other famous crypto pushers, such as Mila Kunis, Aaron Rodgers and Tom Brady, were quiet as well (although Mr. Brady’s and Mr. Rodgers’ profiles on Twitter still feature laser eyes, a popular symbol of Bitcoin bullishness).
Jimmy Fallon, who has discussed nonfungible tokens on the air, joked while advertising for NBC Universal’s upfront showcase on Monday that he was related to three separate shows because of Bitcoin. A representative for Naomi Osaka, the tennis star who became an ambassador for the crypto exchange FTX this year, wrote in an email that “she is sadly overseas and not available.”
In FTX’s Super Bowl commercial, comedian Larry David denigrates important inventions such as the wheel and the light bulb before rejecting the crypto. The ad winkingly urged viewers: “Don’t be like Larry.”
Jeff Schaffer, the director of that Super Bowl spot, said in an email that he and Mr. David did not have a comment on the market collapse.
“Unfortunately I don’t think we’d add anything to it as we have no idea how cryptocurrency works (even after having it explained to us repeatedly), don’t own it, and don’t follow its market,” he said. General Chat Chat Lounge “We just set out to make a funny commercial!”
Crypto’s instability underscores a fundamental fallacy of celebrity marketing: A famous person’s endorsement may be memorable – the actor John Houseman’s spots for the Smith Barney investment firm are decades ago – but it doesn’t make the product being pushed inherently worth trying.
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“This is what they do – they’re celebrities, they’ve offered money to promote something that has promise,” said Beth Egan, an associate professor of advertising at Syracuse University.
But it was not without risk, Ms. Egan said. If the crypto industry had kept booming – or if it returns to its highflying status – the endorsers could be lauded. But if the downturn continues, their reputations could suffer.
“If I were Matt Damon or Reese Witherspoon, I would be questioning my willingness to take on this kind of gig,” she said.
In March, Crypto.com spent an average of $ 109,000 a day on digital advertising, according to estimates from the advertising analytics platform Pathmatics. In May, that dropped to $ 24,669 a day.
Spending at FTX, one of the crypto companies that most aggressively used celebrity promoters, slipped to $ 14,700 a day this month from $ 26,400 a day in March, according to Pathmatics.
“We sort of created this arms race,” said Brett Harrison, president of FTX’s US arm, said about the use of celebrity endorsers in an interview before the Super Bowl in February. Famous FTX brand ambassadors have included David, Mr. Brady and his supermodel wife, Gisele Bündchen, the golfer Albane Valenzuela, the football player Aaron Jones, the basketball player Stephen Curry and the baseball player Shohei Ohtani.
“We’ve planted our flag there and we have such a great presence that racing to grab all the remaining properties and athletes and celebrities is not necessarily our top priority,” he said.
But the company, which would most likely spend “a significant amount more money” marketing, is now focusing on reaching different demographics and more low-key tactics, such as digital campaigns and Google ads, he said.
“We’re thinking of doing things a little bit differently than we were in the past,” he said.