Celebrity NFT endorsements: From 90% losses to complete scams

The world of Non-Fungible Tokens (NFTs) has captured the imagination of artists, collectors, and investors alike. But as with any emerging market, the involvement of celebrities has brought both credibility and skepticism.

The star power boost

Celebrities have the power to bring mainstream attention to niche markets. When stars like Steve Aoki, Snoop Dogg, and Justin Bieber dive into the space, they bring with them a legion of fans, amplifying interest and driving up demand.

Aoki, known for his EDM hits, has been an avid collector, investing over $1.6 million in esteemed collections like Doodles and Cool Cats. Similarly, Snoop Dogg’s record-setting $7.09 million purchase of the “Right-click and Save as Guy” made headlines, showcasing the potential value in this digital frontier.

The flip side: celebrity NFT pitfalls

However, the celebrity-NFT relationship hasn’t been all rosy. The volatile nature of the market has led to significant losses for some of these high-profile investors. Aoki’s Doodle, which he acquired for close to $1 million, plummeted to a value of just $12,000. Justin Bieber’s Bored Ape, once worth $1.3 million, saw its value crash to a mere $70,000. Such drastic declines highlight the speculative nature of the NFT market and the risks associated with it.

Moreover, the celebrity endorsement of NFTs has sometimes been marred by accusations of scams and pump-and-dump schemes. The recent downturn in the markets has left many early celebrity enthusiasts grappling with significant losses. DJ Marshmello’s NFT, which he bought for a staggering $1.4 million, recently had a top bid of just $1000 on OpenSea, a decline of over 99.9%.

Notable scams – Lana Rhoades and Soulja Boy

The NFT space has also seen its fair share of controversies. Lana Rhoades’ “Cryptosis” NFT project, which promised unique cartoon images of the star, turned out to be an apparent scam, with Rhoades allegedly making off with $1.5 million worth of Ethereum. Along similar lines, Soulja Boy faced accusations of misleading marketing practices for his NFT releases.

Furthermore, not all celebrity interactions with NFTs have been endorsements. Some, like the Bored Ape purchased by Justin Bieber, were personal investments that went awry. Bieber’s Bored Ape, which he acquired for $1.3 million, is now down by 90%, a stark reminder of the market’s unpredictability.

While the losses faced by celebrities like Aoki, Bieber, and Snoop Dogg represent only a fraction of their vast fortunes, they serve as cautionary tales for average investors. The world of NFTs, while promising, is fraught with volatility. As the recent article on Aoki’s investments highlighted, even seasoned investors can face significant downturns.

Double-edged sword

The involvement of celebrities in the space has been a double-edged sword. On the one hand, their endorsements bring attention, credibility, and capital to the market. On the other, their high-profile losses and controversies underscore the risks inherent in such speculative investments.

As the landscape continues to evolve, it’s likely that celebrity involvement will persist. However, potential investors, whether celebrities or average individuals, should approach the market with caution, understanding the risks and rewards. The meteoric rise and subsequent fall of many NFTs serve as a reminder that while the digital art revolution holds promise, it’s still a market in its infancy, susceptible to hype, speculation, and volatility.