In 2017, at the hight of the ICO boom, several celebrities – with little to no cryptocurrency experience – were recruited by blockchain startups to promote their token sales.
While this helped to boost fundraising efforts, as it gave projects more attention that they would have otherwise gotten, it also creates concern that unknowing investors were being roped into investments they maybe did not fully understand.
In this article, we will look into how the biggest celebrity-endorsed ICOs have performed to investigate whether there is a correlation between celebrity endorsements and token performance in the secondary market.
Floyd Mayweather, Paris Hilton, Steven Seagal, Jamie Foxx, and DJ Khaled have all made headlines when they were among the first celebrities who promoted initial coin offerings.
This trend started in mid-2017 when boxing legend Floyd Mayweather become the first celebrity to promote a token sale and ended in early 2018 when it became evident that celebrities were being paid (and duped) into promoting projects that can only be described as scams.
Partly thanks to Floyd Mayweather’s endorsement, the blockchain prediction markets platform Stox managed to raise $30 million during its ICO. Stox was raising money to develop a Bancor-based prediction platform that enables users to leverage the wisdom of the crowd to bet on the outcomes of events, including sports, finance, and politics.
The Stox (STX) token, an ERC20 Ethereum token, was sold for $1.103 during its token sale in August 2017. At the time of writing, the STX token was trading well below its issue price at $0.09.
Despite launching its product in 2018, the value of the Stox token was in free fall throughout most of 2018 – in line with the majority of the altcoin market – to lose over 95 percent of its initial value.