Stop Listening to Celebrity Advice About Crypto (And Everything Else)



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Some people may get rich from cryptocurrency, but the learning curve for newbies is steep. You might be tempted to overlook the complexities and just take the advice of someone influential, like your favorite celebrity. But is that a smart move?

Celebrities are not financial advisors

This may seem obvious, but celebrities are not paid to give financial advice. Instead, they are paid to promote products, and sometimes those products are more or less financial investments.

CNBC reported in January 2022 that media personality Kim Kardashian and professional boxer Floyd Mayweather were facing lawsuits over a particular cryptocurrency called EthereumMax. Both celebrities were paid large sums to promote EthereumMax to their fans. Later, EthereumMax dropped in value by about 97%, leading investors to accuse these celebrities of participating in a “pump-and-dump” scheme.

Pump-and-dump scammers recommend (or rather, hype) an investment so that it appreciates in value before selling their investments for a high return. That “dumping” lowers the value to those who are fooled into the investment, causing them to lose money. It’s an old trick that used to be done over the phone, but now it’s even more common thanks to the internet. And EthereumMax is far from the only crypto-based scam out there.

Do real research

It is worth noting that serious crypto enthusiasts have never seen EthereumMax as a good investment or even a legit cryptocurrency. It was and still is known like, to use an industry term, a ‘shitcoin’. But how can the average person who watches Mayweather’s fight or Kardashian’s Instagram stories know? It’s that lack of knowledge on the subject that pump-and-dump scammers rely on.

The most generous thing you can say about Kardashian and Mayweather is that they were ignorant of the alleged plan. Influencers often claim that they only promote products they really believe in, but cryptocurrency is a complex technology to say the least. With the busy lives of celebrities, how realistic is it to expect that they have thoroughly researched the subject and developed informed perspectives?

That’s why you should do independent research and not listen to anyone being paid to recommend something to you. While influencers might claim that they only promote products they believe in, it is challenging to assume that they have thoroughly researched and gained real insight into each cryptocurrency before agreeing to promote it.

Likewise, you should also not listen to someone who wants to make money from your investment. That includes people who have already invested in a cryptocurrency; you buy will likely increase their returns. Don’t believe the hype.

Instead, listen to legit financial experts and make sure you really understand how cryptocurrency works and the fraud surrounding it. There are risks associated with any investment, including cryptocurrency, and you should make yourself aware of what those risks are before making any decisions.

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