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Are Celebrity-Endorsed Cryptocurrencies Ever A Good Investment Idea?

In a market of over 10,000 cryptocurrencies, it’s sometimes hard to stand out from the crowd. This is particularly the case when so many coins and blockchains are variations on the same basic idea, be they examples of decentralized money or smart contract platforms.

However, there is one quick-and-easy promotional method certain cryptocurrencies have been increasingly taking in recent months: celebrity endorsements.

Logan Paul has enforced cryptocurrencies in the past.

Yes, a relatively large number of newer cryptocurrencies have been taking the option of paying (relatively) famous people to endorse and/or name drop them. The most recent example of this is Dink Doink, a meme cryptocurrency that was promoted by none other than professional Floyd Mayweather-puncher Logan Paul. Popular internet-based detective Coffeezilla described the coin in a recent video as a “scam coin,” “cash grab” and a “Ponzi scheme,” calling into question the legitimacy of Paul’s involvement with it.

But as shady as Paul’s endorsement of Dink Doink is, it’s very, very far from being the only celebrity promotion of a highly dubious new coin. The question is: are celebrity-endorsed cryptocurrencies ever a good investment? Could they ever make you real money?

In the main, the only answer to this question is: no. The only exception to this are certain major coins (e.g. bitcoin) which receive endorsements or investments from celebrities because of their fundamentals, and not because they’ve been paid to do so or because they’re part of an obvious short-term pump-and-dump scheme.

Dink Doink May Be The Worst Celebrity-Endorsed Cryptocurrency Ever

For anyone who has had the good luck of never hearing about Dink Doink (DINK) before, it was launched on June 23 with the aim of knocking “down the barrier between entertainment and crypto.” It’s a coin with a silly cartoon character for a mascot, who will appear in a series of South Park-inspired shorts.

So far, so crummy, but the coin gained some degree of notoriety when Logan Paul came out in support of it on June 28.

Source: Twitter

Needless to say, the coin’s price skyrocketed shortly after this tweet, rising as high as $0.0000000026902. Yes, this is pretty low, but it represents a 650% increase over its June 23 price of $0.0000000003575.

The thing is, while Paul’s tweet implied that he’d only just come across the coin and was (inexplicably) impressed by it, he was actually involved in its creation and launch, as this Business Insider article makes clear.

So already, alarm bells should be ringing for anyone hearing about Dink Doink only now. If they aren’t, it’s worth pointing out that nearly 80% of DINK’s total supply of 10 quadrillion coins is owned by only 100 addresses, highlighting how a small number of large holders are waiting to dump on a widening pool of smaller bagholders.

It’s also worth pointing out that DINK’s price has fallen pretty consistently since Paul’s shilling.

Source: PooCoin

As the chart above shows, most people coming to Dink Doink based on Logan Paul’s promotional activities would have lost money. Still, this hasn’t stopped Paul from continuing to tweet about DINK, with one post on July 10 causing an extremely modest jump in price. It couldn’t, however, stop the coin’s continued decline.

Source: Twitter

Other Celeb Coins, Other Losses

Other coins recently endorsed by celebs have also suffered similar downward trajectories.

For instance, Kim Kardashian promoted the Ethereum Max cryptocurrency on her Instagram. Despite the name, and despite being an ERC-20 token, Ethereum Max has nothing to do with Ethereum or any of its forks. Still, Kardashian’s (paid) promotion of the coin on June 14 caused it to jump by over 200%.

In fact, this wasn’t the first time a celebrity had shilled Ethereum Max. On May 26, former NBA basketballer and ESPN analyst Paul Pierce tweeted that he “made more money with this crypto [i.e. Ethereum Max] in the past month then I did with y’all in a year.”

Source: Twitter

This tweet was Pierce’s response to ESPN, who had recently fired him (for reasons not really worth going into). And the market responded by pumping Ethereum Max from $0.000000002115 to $0.000000863, a rise of just over 40,000% in three days.

EMAX’s price since mid-May. Source: CoinMarketCap

Also needless to say, Ethereum Max has declined to its former low levels since both Pierce’s and Kardashian’s tweet. So unless you had inside knowledge that either Pierce or Kardashian were about to pump the coin, you would have lost a hefty amount of money jumping on its bandwagon.

Another (fairly) prominent example comes from SafeMoon, another coin designed to rise in price and do pretty much nothing else. It was promoted via Twitter on April 19 by YouTuber Daniel Keem (AKA Keemstar), who declared that he truly believes in the cryptocurrency, that its team “are doing some much good stuff,” and that it “sticks out” from the crowd.

Source: Twitter

As the price chart below reveals, SAFEMOON surged in the wake of this tweet, from about $0.000003 on April 19 to an all-time high of $0.00001375 on April 20. This is a rise of roughly 350%, and while the coin also benefited on May 14 from a similar plug by musician Diplo (and then Dave Portnoy), it has since fallen by around 80% from its ATH.

Source: CoinMarketCap

If you’re being skeptical (and it’s my job to be skeptical), you’d think that such tweets were posted by people who, having already bought a large quantity of the cryptocurrency in question, knew they would greatly pump its price by promoting it. And once their impressionable followers bought up the coin and boosted its price, they would then dump it for a profit, leaving their fans holding the bags.

Other examples of self-serving celebrity endorsements are nearly endless. Here’s only a small selection of recent endorsements (of coins which inevitably fell badly afterwards):

Dogecoin, Bitcoin and Other Major Cryptocurrencies

While the above cases obviously relate to coins of very low quality (sorry, Tron), it needs to be remembered that plenty of celebrities have also spoken out in favor of Bitcoin and other bigger cryptocurrencies.

Does this mean people should therefore avoid Bitcoin or, say, Dogecoin, the latter of which has been promoted very vigorously by Elon Musk?

Well, the key to working this one out is to ask yourself a question: would you still buy a cryptocurrency if it hadn’t received publicity from a celebrity? If the answer to this question is ‘yes,’ if you genuinely believe that a cryptocurrency has the fundamentals and use cases that will enable it to attract investors long after famous people have stopped talking about it, then you should still probably buy it.

Basically, the trick is to just ignore celebrities altogether and buy what you think has a serious case for growing and being adopted in the long-term. And even if a celebrity does talk glowingly about a cryptocurrency, it’s worth considering whether they’re doing this because they really appreciate it (e.g. Steve Wozniak), or because they’re being paid to or want to try to pump the coin.

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CryptoVantage Author Simon Chandler

About the Author

Simon Chandler

Simon Chandler is a journalist based in London. He writes about technology, markets and politics, and has bylines for Forbes, Digital Trends, CCN, Wired, TechCrunch, the Verge, the Sun, the New Internationalist, and TruthOut, among many others. His Twitter handle is @_simonchandler_

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