The new survey revealed bleak looks at the apparent willingness of retail investors to follow advice on digital assets from celebrities and influencers.
Celebrity advice is very important for many cryptocurrency holders
According to survey Among 2,200 adults in the United States, 45% of respondents holding cryptocurrencies said they would likely buy a digital asset if it was promoted by a celebrity. There were also some more promising results, with three-quarters of cryptoinvestors saying they were investing on the recommendation of a family member or friend, while 81% would invest in response to advice from a financial advisor.
Nearly 20% of all respondents and nearly one-third of cryptocurrency owners said they knew of a post posted on Kim Kardashian’s Instagram account promoting the ETH Max (EMAX) token in early June. 19% of respondents who saw the ad on Instagram admitted that they then invested in ETH Max.
The project was involved in several controversies. The EMAX has seen meteoric rise after it was declared on May 26 as the “exclusive cryptocurrency accepted for online buying of tickets” for the undefeated boxer Floyd Mayweather’s boxing match with YouTuber Logan Paul on June 6.
While EMAX traded for just $ 0.00000000073 (nine zeros) before the announcement, after reports of its acceptance in the boxing exhibition, prices climbed above 0.00000085 (six zeros) by June 1 – a profit in excess of 116,000% in just one week.
After ETH Max dropped more than 99% of its value in less than two weeks, Kim Kardashian advertised its 250 million followers on June 13, announcing that 50% of EMAX tokens held by the project’s administrator wallet had been burned.
While the token traded for only $ 0.000000007676 (seven zeros) before the post was posted on Instragram, it rose to 0.000000235 (six zeros) by June 14 – a gain of 3,000% in less than two days.
EMAX has been falling steadily downwards since mid-June, with the token now down at 0.000000021 (seven zeros) -91% down from local highs following the promotion of Kim Kardashian on Instagram.
The incident did not go unnoticed by financial regulators, with Charles Randell, head of the UK’s Office of Financial Ethics, calling Kardashian’s post on Instagram “the biggest financial impact in history.” He added:
“I can’t say if this is a particular token [Ethereum Max] fraud. But influencers are usually paid by fraudsters to help them pump new tokens. ”
Kim Kardashian is not the first celebrity to anger regulators for promoting cryptocurrencies, and probably won’t be the last. Among the best known is the case from 2018, when the US Securities and Exchange Commission accused Floyd Mayweather and musician DJ Khaled of illegally promoting the Centra’s ICO.