Cristiano Ronaldo is facing a lawsuit over his cooperation with the Binance crypto exchange. The soccer star is by no means the only celebrity promoting the crypto market. For inexperienced investors, such partnerships are a tempting danger.
Lionel Messi is the advertising face of the Bitget crypto exchange, Hollywood star Matt Damon promoted Crypto.com’s offer, NFL legend Tom Brady appeared for FTX and hotel heiress Paris Hilton presents herself as an NFT queen.
Celebrities are interesting advertising media for the crypto market. The stars enjoy great fame worldwide and have a loyal fan base. This is also reflected in her millions of fans and followers on social networks such as Facebook and Instagram.
Binance, for example, is said to have briefly seen a 500 percent increase in online searches for the crypto exchange when the release of Ronaldo NFTs became known. But what seems lucrative for crypto exchanges and brokers can, in the worst case scenario, become a financial fiasco for investors.
Advertising message: Be successful like your star
What is particularly problematic is that fans of advertising media often lack knowledge about investing. The stars on social media are often aimed at an audience that has little experience in dealing with various financial products and has little or no ability to assess the opportunities and risks of stocks or cryptocurrencies.
However, when a favorite celebrity publicly presents themselves as a cryptocurrency buyer or claims to trade on a particular exchange themselves, it is tempting to follow suit. After all, the musicians, actors or athletes are often very successful and wealthy people who give the impression that they know exactly what they are doing. They seem to have found a formula for success that you just have to follow to become rich and successful yourself.
The moment a commercial appears with a celebrity or he promotes a supposedly great exchange or token in a new post, a lot of emotions are awakened in his fan. The advertising encourages you to buy. From the looks of it, it must be a really great product if Ronaldo or Paris Hilton also use it.
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Risk of total loss
This can lead to inexperienced investors sensing quick money and investing their savings without preparation. However, without financial education, there is a risk that investors risk far too much and do not diversify their investments widely, as experts recommend. Or they leave large funds on advertised crypto exchanges instead of storing them safely in a hardware wallet.
In the worst case, the bad thing only happens when the purchased token experiences a sharp decline in price or a worst-case scenario occurs, such as FTX, in which some investors suffered a total loss. It is also true that inexperienced and risk-taking investors offer advertising companies an excellent opportunity to make quick money. This is part of the calculation, even if none of the companies would admit it publicly.
What is critical here is not only the behavior of companies from the crypto market, but especially of the advertising celebrities. For good money, they are willing to advertise something that their investors may not understand at all. And maybe not herself either. Just because a celebrity promotes a coin or an exchange doesn’t mean that they actually own it themselves or trade there. In these cases, the stars do not live up to their role model function. The fans pay the bill.
Therefore, extreme caution is advised when celebrities appear on the crypto market. Unless you are an inexperienced investor, you should always build up financial knowledge first, for example in the BTC-ECHO Academy. Even if your favorite star is behind it.
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