Ignore Tom Brady and Matt Damon on crypto and celebrities on money in general

Amidst the current crypto slump, many people are a little upset with the celebrities who have been paying for these things. Gwyneth Paltrow, Tom Brady, Reese Witherspoon, and even Larry David were happy to help integrate crypto in recent months, just to shut up now that things have gotten a little rough. For Matt Damon, “fortune favors the brave“…who apparently aren’t brave enough to say that maybe it was a bit of a stretch to try to get regular people to stake their hard-earned money on hyper-speculative assets.

If cryptocurrencies were so sure to make money, to an extent, why would it need so many high-profile celebrity endorsements? After all, money is the most famous celebrity there is.

Here’s the thing: famous people endorse and endorse financial products and services all the time, products and services that fall on the spectrum of blur. If you’re going to be mad at LeBron James for appearing in a Crypto.com advertisementyou should probably be upset about those too Tom Selleck Reverse Mortgage Adsor the places where William Devane talks about buying goldor the litany of A-listers enter the SPACs. In the 1990s, Whoopi Goldberg was a flooz spokespersonthe cyber currency of that era that was finally brought down due to crime and fraud.

This may seem like a bit of an obvious thing to point out: celebrities are always doing endorsements, but I think it’s worth stopping to do so, specifically, with regards to money. Personal finances and investments are supposed to be unattractive; how you’re allocating your 401(k) isn’t particularly good. Now, marketers, advertisers, and the culture at large have managed to turn it into a hobby and lifestyle. Confidence has greatly diminished in traditional financial institutions. People might think Bear Stearns wasn’t doing a great job in the 2000s, so why not take a chance on what Floyd Mayweather says is a good idea now? Companies can maneuver this institutional mistrust, replacing cold, unreliable, faceless banks with likeable celebrities, to whom consumers might be more open.

Banks left customers “in their tracks” after the 2008 global financial crisis, explained Ana Andjelic, a brand executive and expert on the sociology of business. “What is this trust replaced with?” she said. “With brands, with celebrities.”

Yes, famous people are often rich, but not because they participated in a get-rich-quick scheme or made a smart investment in some obscure product. They often have financial advisors who help them manage and build their wealth, and those advisors don’t tell them to hoard dogecoin.

Celebrities = $$$

Companies recruit famous people to try to sell their stuff because they know it can work. According to one 2012 to study from Harvard Business School, athlete sponsorships lead to a 4 percent increase in sales. Multiple studies have found that celebrity endorsement ads increase stock prices.

When it comes specifically to finances, the rich and famous aren’t the most influential in consumers’ lives, but they do make a difference. A morning consultation of 2021 poll found that 20 percent of investors and 45 percent of crypto owners would invest in crypto if famous people endorsed them (though still behind financial advisors, family or friends, and business reporters). Younger consumers can get swept up in fame, too — CreditCards.com found that 28 percent of Gen Zers and 24 percent of millennials said they seek financial advice from social media and influencers.

With people no longer flopping in front of network TV on Friday nights, the captive audience of commercials, brands are increasingly relying on celebrities and influencers to connect with consumers, Shiv explained. Gupta, a digital marketing specialist and director of the consulting firm Quantum Sight. . “Channels are shrinking,” he said. A celebrity can catapult their product to consumers through their existing audiences and spheres of influence. You can see how it happened with crypto. “You’ve had the nerdy sphere or the geek sphere pushing the concept of crypto as something that has potential,” Gupta said. “The next step was Larry David and everyone else who came in and started talking about crypto. It was more about saying, ‘Look, it’s conventional.’”

Making a financial product go mainstream makes it more comfortable for consumers, making them feel like it’s okay to try. It can also cause them to overlook the stakes, even in high-stakes spaces.

“A-list celebrities endorsing brands is nothing new, we’ve seen it for decades. Selling cryptocurrencies and NFTs is obviously much more complex and I would say requires more professional responsibility than selling typical consumer goods,” said Anindya Ghose, a business professor at NYU. “If you’re promoting potato chips and energy drinks, that’s a different thing.”

If you bought a bag of chips because some actor said so and it turned out to be gross, whatever. But if he did a reverse mortgage, what regulators have warned about ads for, and you accidentally lost your house because Tom Selleck said, that’s not so good. The spotlight is now on the youth and cryptocurrencies, but no generation is immune.

“Some people say, ‘Well, I like Tom Selleck, I grew up with Tom Selleck, he seems like a respectable guy. After all, he fought crime in magnum ip‘” Gupta said. “It’s a generational thing, he’s getting old with you.”

You probably don’t listen to celebrities about money.

If you had asked me in 2004 if I would be listening to the guy from the oc or the boy from goodwill hunting about what to do with my money, hopefully I wouldn’t have said anything, but I probably would have said the same thing. goodwill hunting Type. It turns out that 2004 I would have been wrong. Actually, you shouldn’t listen to any of the goodwill hunting guys because Ben Affleck shillings for sports bettingwhich is also often not ideal for the end user’s wallet.

Turns out maybe I should have said the oc guy, Ben McKenzie. He has some points about listening to famous people about money and specifically cryptocurrencies…what you shouldn’t do. McKenzie called celebrities pumping crypto a “moral disaster” in a 2021 article for Board with journalist Jacob Silverman. “These rich and famous entertainers could very well be pushing payday loans or seating their audience at a rigged blackjack table,” they wrote. (To be fair, McKenzie has something to gain here, too: he and Silverman are writing a book on crypto scams right now that they’re probably getting paid for, and he’s become a anti-crypto celebrity.)

Celebrities may not have their fans’ best financial interests at heart. I love Reese Witherspoon, but his crypto tweet, at least for now, feels pretty irresponsible. “At the end of the day, it’s all about the money,” Andjelic said.

It’s not just that celebrities encourage unnecessary risks. Kim Kardashian and Floyd Mayweather may have recently been part of a cryptographic pump and dump scheme. The boxer is no stranger to scandal in the crypto space: in 2018, he and music producer DJ Khaled settled charges from the SEC for failing to disclose that they were paid to promote initial coin offerings, or ICOs, a such a dubious trend you rarely hear about it. ActorSteven Seagal be in trouble for something similar, too.

It’s easy and tempting to dismiss much of this; Of course, celebrities shouldn’t be a reliable source of financial information. And regulators have something to say here on consumer protection: sponsors are he’s supposed to be honest about being paid. But famous people are often creeping into the way we think about money in a way that is a bit awkward. If you really think about it a bit, celebrities being associated with even traditional names in finance is a bit, well, huh. Jennifer Garner seems fine, but she’s not rich either just because she’s so smart with her Capital One card.

Celebrities and financial brands are joining forces to sell people a lifestyle, an aspiration to wealth that may not be realistic. Celebrities lend their reputations to products that can be questionable. They often do so without acknowledging their own financial interests: Tom Brady is not just a spokesman for cryptocurrency exchange FTX, he is an investor in the company, or realizing that they can take risks that the average person might not. And the downside risk of lending your reputation, if a project goes from the bottom up, may not be much.

“It’s not like, oh, Tom Brady stopped doing anything and now he’s just a crypto kid, you know?” Andjelic said. “People worry for a minute.”

Except, of course, the people who lost.

We live in a world that is constantly trying to trick and mislead us, where we are always surrounded by scams big and small. It can feel impossible to navigate. Every other week, join Emily Stewart to see all the little ways our economic systems control and manipulate the average person. welcome to the big squeeze.

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