2017 saw the popularity and awareness of cryptocurrency increase exponentially. Video’s started to emerge online of well known, successful people talking about Bitcoin and other cryptocurrencies, discussing the pros and cons of the technology.
Other Celebrities shared their speculative views on the price of the cryptocurrency. As the price of Bitcoin hit monumental highs in December 2017, media organisations around the world were unable to ignore the staggering rate at which the value increased, causing more well known public figures and celebrities to speak out and share their views on the volatile markets.
As the option of holding an Initial Coin Offering (ICO) became one of the most widely used methods of raising capital for a business or project, the entirely unregulated world was bound to experience some shady practices.
The number of ICO’s held in 2017 increased so much it’s been dubbed the year of the ICO. The trend is continuing into 2018, despite the fact that nearly half of the ICO’s held in 2017 have already failed. This is no different to traditional methods of raising funds though, as the failure rate of startup businesses is far higher than the success rate.
Celebrity Endorsements of cryptocurrencies and ICO’s
There have been many well know celebrity endorsements of cryptocurrencies, from the boxing legend Floyd Mayweather Jr endorsing 3 ICO’s in 2017, to Barroness Michelle Moan launching her own cryptocurrency.
Instagram super star Dan Bilzerian has also gone public announcing his impressive Bitcoin gains on the Social Media platform.
Recently however, one of the ICO’s promoted by Floyd Mayweather has been shut down after the SEC investigated the project. Centra Tech raised a staggering $32 Million USD last year, making it potentially the biggest scam ICO to date!
The founders were recently arrested while attempting to leave the country and have been charged after making false claims of a Visa partnership, as well as making up team members with impressive credentials.
After the recent Centra Tech arrests, other similar projects building financial services are now under scrutiny, including the popular Monaco project who also claim to be developing a Visa cryptocurrency debit card. Could Monaco also be a scam?
Jamie fox and global rap artist DJ Khalid have also been known to promote ICO projects using their Social Media platforms.
Pop star Bjork announced during the launch of her most recent album that she would be accepting cryptocurrency, as well as giving anyone who bought the album free cryptocurrency in return!
Can Celebrity endorsements be trusted?
Although some of the projects endorsed by these Celebrities may have good potential, it’s clear that not all can be trusted.
The recent Centra Tech scandal, potentially the biggest scam ICO yet, promoted by Floyd Mayweather during his upcoming bout with UFC’s notorious Conor McGregor makes it evident that not all celebrity endorsements of cryptocurrencies can be trusted.
Leaked messages have also revealed recently that John McAfee, a well known celebrity, renowned for being an eccentric early adopted who now runs a profitable Bitcoin mining operation, charges $105,000 per tweet to projects looking to get promoted.
He even has a website selling the services, leading us to believe that many other endorsements we see are also financially incentivised rather than being truly backed by the influencer.
Within the cryptocurrency industry, nothing can match the power of a McAfee tweet. Frequently, a single tweet has resulted in more than a million dollars of investment into an ICO, and multiple currencies have increased more than 100% in price from a single tweet.
In addition to Mr. McAfee’s 810,000 direct followers, each of his tweets reach beyond them, frequently to many millions of crypto adherents, as evidenced by this Twitter analytic.
Individual tweets, whether created in Mr. McAfee’s voice or by the company whose products we are promoting, cost $105,000 per tweet. Unless there are special circumstances we will do no more than seven tweets per promotion. This ensures that other projects and technologies will have a chance to use our services, since we limit promotional tweets to a max of two per day.
The conclusion has to be that you really can’t trust what these celebrities are saying when it comes to cryptocurrency projects. Although some may genuinely believe in the project and their integrity can be trusted, there are no guarantees and you must use your due diligence and do your own research thoroughly before investing.
Never invest more that you’re willing to lose, and given that more than half are doomed to fail, it’s probably wise to expect the project to fail.