Celebrity crypto endorsements haven’t turned out so well

Sascha: [00:00:00] More from Equity Mates media. This is the dive. I'm your host, Sascha Kelly. Celebrities love cryptocurrency. Well, probably more accurately, celebrities are willing to endorse anything but the right deal. Reese Witherspoon, Gwyneth Paltrow, LeBron James and Paris Hilton. The list of celebrities that have promoted crypto over the past few years is long, but most of these endorsements haven't turned out so well. What does Matt Damon say on that Bitcoin commercial? Fortune favours the brave. My dad said he listened to Matt Damon and lost all his money. Yes, everyone did. Crypto markets are down over the past year. Bitcoin is down 47%. Aether is down 40%. And many crypto related companies have collapsed. 3 hours capital Celsius and terry USD. To paraphrase Warren Buffett, the tide has gone out and now we're seeing who was swimming naked. It's Friday, the 12th of August, and today I want to know and crown the worst celebrity crypto for part of the 2020 2021 bull market. To do this, I'm joined by my colleague and the co-founder of Equity Mates. It's Alec, Renehan. Alec, welcome to the dive. 

Alec: [00:01:09] Hey, Sascha, this will be a good one, I think. 

Sascha: [00:01:11] Did you get pulled in by any celebrities promoting or spruiking their crypto wealth? 

Alec: [00:01:16] I didn't even need celebrities to sell me on crypto. I just followed my own dumb intuition into it. 

Sascha: [00:01:22] Hey, I'm right there with you. There in glass houses. Can't be throwing stones. 

Alec: [00:01:27] That's right. But hey, let's load up on some stones and throw them anyway.

Sascha: [00:01:30] Absolutely. So we all lived through the crypto mania of the past few years. The FOMO was real. Bitcoin. Ethereum nfts. Web3. Everyone became an overnight expert or new and overnight expert on the monetary system and decentralised systems. Take me through some of the wildest moments of the past two years. [00:01:51][20.5]

Alec: [00:01:52] Yeah, well, Sascha, it all began with COVID. We got lockdown, sports stopped, stimulus rained down upon us, and millions of people were locked at home and got interested in investing. It's estimated that 20 million Americans started investing in the stock market during the pandemic, and millions of those people also got in to crypto markets. [00:02:11][19.6]

Sascha: [00:02:12] Crypto craze. What is it? Where's it going and what it means for you? [00:02:16][4.1]

Alec: [00:02:16] And with all this interest and with central banks printing billions of dollars, we saw a massive bull market in both the stock market, but also crypto markets. The total market cap of all of crypto, the total value of it all surged to almost $3 trillion. These days, it's now closer to 1 trillion. It's estimated that 22% of Americans now own some Bitcoin. That's about 46 million people. In March, Crypto.com was spending over $100,000 a day on digital advertising, and I think where we saw it most acutely was in sport. Crypto companies have spent over $2.4 billion on sponsorships with sporting organisations just in the last year. [00:03:01][44.6]

Sascha: [00:03:02] It's hard to think of a card where you don't see some form of crypto advertising. [00:03:05][3.8]

Alec: [00:03:06] It was crazy. Sascha, do you remember the Super Bowl from last year, the NFL so quickly here, Stafford. [00:03:11][4.7]

Sascha: [00:03:11] Under pressure, get sacked. Would it surprise you to say I don't, but I always watch the ads afterwards. [00:03:16][4.7]

Alec: [00:03:17] It was nicknamed the crypto bowl because there were so many crypto ads. [00:03:20][3.4]

Audio clip: [00:03:21] This moment with these companies buying ads in the Super Bowl, it sort of caps off what has been a long run up for the cryptocurrency sector in terms of its mainstream recognition and acceptance. [00:03:33][12.3]

Alec: [00:03:34] And remember, these ads cost as much as $7 million for 30 seconds. But Sascha, aside from the Super Bowl, CRYPTO.COM and Exchange paid $700 million last year for the naming rights of the Staples Centre, where the L.A. Lakers and other live sporting teams play is now called the Crypto.com Arena. Not the best name outside. [00:03:54][20.0]

Sascha: [00:03:54] Not the catchiest. And it's not just sport, it's across culture as well. The hype was insane and that was helped by some big names. Paris Hilton springs to mind. She even named her Lapdogs, Crypto and Aether. That's hot. [00:04:08][13.8]

Alec: [00:04:09] Yeah. And Paris Hilton wasn't alone. All kinds of celebrities filled their pockets with cash from crypto endorsements. [00:04:15][6.1]

Audio clip: [00:04:16] It's a safe and easy way to get into crypto. Yeah, I don't think so. [00:04:18][2.8]

Alec: [00:04:19] Gwyneth Paltrow and Mila Kunis, Larry David, LeBron James, Cristiano Ronaldo, Naomi Osaka. The list of really well-known celebrities from across movies, culture, music and sport all promoting crypto. [00:04:32][13.2]

Audio clip: [00:04:33] I can't tell you everything, but if you want to make history, you've got to call your own shots. [00:04:37][4.4]

Sascha: [00:04:38] So on today's episode, we're looking back at crypto mania of 2020 and 2021 and some of these celebrity endorsements that came with it. And we want to give out awards to really celebrate some of the more absurd moments of the past few years. So, Alec, today we're going to look at three awards. We're going to look at the worst. Celebrity endorser, as in the person who lost the most money. Our second award is going to be the most surprising celebrity endorser, as in the one that we didn't expect. And then our third and final award is the moment we should have realised it was a bubble and this is probably our mea culpa and we should have realised what was going on, Alec. So let's start with the worst celebrity endorser. Can you give me the nominations? Give me the short. [00:05:27][49.2]

Alec: [00:05:29] We've got to start with Matt. Damon's fortune favours the bold ad. [00:05:32][3.4]

Audio clip: [00:05:33] History is filled with almost. [00:05:35][2.0]

Alec: [00:05:36] Played everywhere around the world. Bitcoin has dropped more than 60% since that ad aired. [00:05:41][5.2]

Sascha: [00:05:42] I remember you coming into the office and taking particular umbrage with this ad. [00:05:46][4.0]

Alec: [00:05:46] Yeah, it was equating buying bitcoin with going to space. It just it felt like a bit of a false equivalence, a. [00:05:53][6.6]

Sascha: [00:05:54] Bit of a stretch. [00:05:54][0.3]

Audio clip: [00:05:55] Fortune favours the brave. [00:05:56][1.5]

Alec: [00:05:58] Yeah, but Matt Damon wasn't alone. Tom Brady, Naomi Osaka, Steph Curry all partnered with. It's a crypto exchange. Bitcoin has dropped more than 35% since their endorsements. Reese Witherspoon partnered with The World of Women NFT Collective. [00:06:13][15.4]

Audio clip: [00:06:14] World of Women and NFT Collectables Project and Community. I'm Randi Zuckerberg. I'm here with the young carracci who is the genius behind the world of women. Congratulations. You are the belle of the ball of the NFT. [00:06:28][14.0]

Alec: [00:06:28] These nets are all down more than 75% since she promoted them. Mark Cuban wrote a blog post titled The Brilliance of Yield Farming about the Titan token. This token subsequently fell 99%. [00:06:43][14.2]

Audio clip: [00:06:44] It was unfortunate. A lot of people lost a lot of money. It impacted the economy. [00:06:47][3.0]

Alec: [00:06:47] French, Montana The rapper created an NFT sneaker collection that also included a real life version of the shoes. In an Instagram post, he wrote. Hold onto your pair and watch the value go up. The value is down almost 90% from when he wrote that. [00:07:02][14.3]

Sascha: [00:07:02] Oh, there's some really good candidates there, but I suspect there's one that you're sitting on. So who's the winner? [00:07:08][5.3]

Alec: [00:07:08] Well, Sascha, the winner of our first award is a joint winner. It is former Boston Celtics NBA star Paul Pierce and Kim Kardashian, who both supported Etherium. [00:07:20][11.7]

Sascha: [00:07:22] It's not easy when you do product shots, when you do post things that are work related post. It's still a job and it's still really hard. [00:07:28][7.0]

Alec: [00:07:29] Paul Pierce wrote that he'd made more money off Aethereal Macs in the past month than he had earned in the past year, working as a broadcaster for ESPN. And Kim Kardashian put up Aethereal marks in her Instagram stories since they both promoted the token. It's down more than 98%. [00:07:48][19.1]

Sascha: [00:07:49] Oh, did he make more in the month than the year because they paid him? [00:07:53][4.4]

Alec: [00:07:54] Yeah, it's probably. Probably not. Probably native of Asterix didn't. [00:07:57][3.5]

Sascha: [00:07:58] Yeah. Well, that's pretty shocking. So one hour down, two awards to go. Let's take a break and then hand out some more statues. [00:08:05][6.5]

Audio clip: [00:08:14] Now that the crypto market has crashed, they're staying pretty quiet. In fact, when reached for comment, there was no response from Matt Damon, LeBron James, Reese Witherspoon, Paris Hilton, Mila Kunis, Aaron Rodgers, Tom Brady or Gwyneth Paltrow. When will we as a society learn to stop buying things from Gwyneth Paltrow? [00:08:33][18.8]

Sascha: [00:08:34] Welcome back to The Dive. Today, we're recapping some of the more outrageous celebrity crypto endorsements of the past couple of years. Alright, Alec. One award down, two to go. We're talking about the most surprising now. Can I hear the short list? [00:08:49][14.3]

Alec: [00:08:49] Yeah. Well, Sascha, the challenge here is almost nothing is surprising in the world of crypto anymore. But as I give you this short list, consider if any of these sentences would have made sense three years ago. [00:09:00][10.6]

Sascha: [00:09:00] This whole episode would have made no sense three years ago. Go ahead. [00:09:04][4.0]

Alec: [00:09:05] Jemmy Fallon bought a bored eighth and hosted a segment on The Tonight Show discussing Nfts with Paris Hilton. [00:09:12][6.3]

Audio clip: [00:09:12] Did You Taught Me What's Up? And then I bought an app. [00:09:14][2.1]

Sascha: [00:09:15] I got an app, too. [00:09:15][0.6]

Audio clip: [00:09:16] Because I saw you on the show with people and you said you got a moon pass. So I went and I copied you and did the same thing. [00:09:21][5.0]

Alec: [00:09:21] Mila Kunis launched an animated Nonfungible token project based on cats who drink alcohol and smoke marijuana in quarantine. [00:09:28][7.3]

Audio clip: [00:09:29] Some people take up baking and knitting and I deep dive into crypto in NFT. [00:09:34][4.8]

Alec: [00:09:35] Justin Bieber spent 500 aether on a board at a yacht club 300% above its floor. [00:09:40][4.9]

Sascha: [00:09:41] I like if you told me that three years ago, I would have been reaching for the dictionary. There's no way any of those sentences would have made any sense to me. [00:09:48][7.5]

Alec: [00:09:49] Well, Sascha, if you don't think those sentences made sense. Here is our winner with this sentence have made sense. Three years ago, Nick Carter of Backstreet Boys fame tweeted about the Safemoon token, the price tag. The day after he tweeted The found a rug pulled the holders and the token dropped 99%. [00:10:07][17.7]

Sascha: [00:10:09] Oh, no. No, it wouldn't. I just want to break down some of the jargon. Essentially, what you're saying is Nick Carter, who hopefully you don't need an introduction to. He promoted something that was essentially a scam because the founder of that coin just pulled all the money out of that project immediately afterwards. [00:10:30][20.9]

Alec: [00:10:31] Yeah, the founder holds a lot of the tokens and when they rug pulled, they basically dump all of their tokens, sell them all, and then there's so much supply and not enough demand that the price plummets. [00:10:41][9.8]

Sascha: [00:10:42] So the lesson I think I'm hearing here is don't trust former boyband stars from the nineties. [00:10:46][4.7]

Audio clip: [00:10:47] There's definitely a part of me that did blame myself. I think that because of the responsibility that I sort of took on. [00:10:54][7.0]

Alec: [00:10:54] I think it's do your own research before investing in anything rather than taking a celebrity endorsement. [00:11:00][5.5]

Sascha: [00:11:01] Fair enough. Okay. So our final award, our final statue, I think actually a couple of the nominations you've read would have been great candidates for this, but we're going to award the moment. We should have all realised it was a bubble. Can you give me the nominees? [00:11:15][14.7]

Alec: [00:11:16] Yes. Now, Sascha. Hindsight is 2020 and you know us saying we should have realised it's a bubble. We do mean we should have realised it was a bubble because we're down on crypto as well. So. Glass houses throwing stones as we said earlier. But some of the short listed moments where we should have realised it was a bubble icon promising to build a $6 billion crypto inspired city in Senegal. [00:11:41][24.6]

Sascha: [00:11:42] These are so ridiculous. [00:11:42][0.5]

Alec: [00:11:44] Miami Chef Chef Bay announced the world's first NFT restaurant in Miami. It wasn't really clear then. I'm still not really clear now on what an NFT restaurant is yet. [00:11:56][12.3]

Sascha: [00:11:56] Is it an art gallery or do you get to eat the food that saw. [00:11:59][3.1]

Alec: [00:12:00] And ask questions? I don't know. [00:12:01][1.6]

Sascha: [00:12:03] Okay, here's the final nominee. [00:12:04][1.0]

Alec: [00:12:05] The final shortlist was D.J. Collard and Floyd Mayweather. Both were fined after promoting Cintra without disclosing it was a paid endorsement. Not that ridiculous there. What was the moment? We should have realised it was a bubble was when one of the co-founders of Centro was then sentenced to eight years in prison for fleecing investors for $25 million. [00:12:27][22.6]

Sascha: [00:12:28] Okay, that one sounds like we definitely should have realised it was a bubble. So who is the winner? Who could possibly top those nominations? [00:12:35][7.2]

Alec: [00:12:36] Well, Sascha, the moment we should have realised it was a bubble was when Mike Tyson created his own NFT of him kissing a pigeon. That NFT is down more than 95%. All right. [00:12:48][11.8]

Sascha: [00:12:49] Okay. Can we have a date of that NFT? When was the moment? We should have all looked in the mirror and understood that this was the frothy epic. [00:12:56][7.0]

Alec: [00:12:57] September 20, 21 was when his first NFT collection was released. [00:13:02][4.6]

Sascha: [00:13:02] And I've got a follow up question. Why is he kissing pigeons? [00:13:06][3.7]

Alec: [00:13:07] Mike Tyson loves pigeons. He owns a lot of pigeons. I think a lot of racing pigeons. Yeah. It's one of his post boxing hobbies. [00:13:13][6.0]

Audio clip: [00:13:13] How many pigeons go round? Maybe. Maybe 14. [00:13:16][3.1]

Sascha: [00:13:17] I learnt so much on this episode already, so it's easy for us to pile on after the fact. But we're not alone in levelling criticism. A lot of these celebrities are receiving backlash, aren't they? We've seen some scathing pieces saying that they've helped drive vulnerable fans to invest in crypto without emphasising the risks. [00:13:36][18.9]

Alec: [00:13:37] Yeah, that's right. Plenty of criticism levelled here. [00:13:40][2.9]

Sascha: [00:13:40] So the new South Park movie is out and it's just one really long swing at crypto. Matt Damon told me Fortune favours the brave and I lost all my big money. [00:13:49][8.5]

Audio clip: [00:13:49] One of the reasons many of those little people bought in later is because of the barrage of celebrities who endorsed it. [00:13:56][6.9]

Alec: [00:13:56] But Sascha, amongst the sea of criticism, I think this is the criticism that you'll like the most. Ben McKenzie, a.k.a. Ryan from The O.C.. [00:14:05][8.1]

Sascha: [00:14:05] Who are. [00:14:05][0.2]

Audio clip: [00:14:05] You? Whatever you want me to be. [00:14:07][1.4]

Alec: [00:14:07] Wrote an article for Slate and credit to him. Wrote it in the midst of all of this, criticising celebrities, endorsing crypto, in particular Kim Kardashian and Paul Pierce for the Etherium Max Promotions. So Ryan from The O.C., someone I haven't thought about in a while, but he was levelling criticism right in the middle of it all. [00:14:25][18.0]

Sascha: [00:14:25] Well, there you go. You know that Seth would have been an NFT fan. [00:14:28][3.0]

Alec: [00:14:29] Complete side. No, but he's now doing a TV show where they have like a crypto start up. So there you go. [00:14:34][5.7]

Audio clip: [00:14:36] We're going to change the world. 

Sascha: [00:14:38] Well, I think today's episode, Alec has taught me that truth is sometimes stranger than fiction, because some of these headlines just seem so ridiculous. So why don't we leave it there for today? 

Alec: [00:14:48] Yeah, and I think the takeaway is that investment fads will come and go and where you will get swept up in them like everyone else. But got to do your own research and you got to not take investment advice from a podcast or from a celebrity social media account.

Sascha: [00:15:02] Words to Live By. If you enjoyed this episode, please tell a friend about it. It really is the best way for our. To go. And if you're listening because you've been referred, then welcome. We have a growing back catalogue that's worth checking out. Go have a listen to some of our past episodes. We've covered China using trade as a weapon, the lottery and even the chaos in air travel. There's really something for everyone. Remember, you can follow us on Instagram @thedive.businessnews. You can contact us by email. The dive at Equity Mates dot com and you can subscribe wherever you're listening right now so you never miss an episode. Thanks so much for joining me today, Alec. 

Alec: [00:15:38] Thanks, Sascha.