Why Are Celebrities Embracing Cryptocurrencies? A Look into This Phenomenon's History and Psychology

Cryptocurrencies have moved away from being a niche interest among tech enthusiasts to being mainstream stores of value, which has attracted a wide range of individuals to them, including celebrities.

However, to understand why celebrities in particular have been increasingly embracing cryptocurrencies we need to look at the history of this phenomenon and the psychological factors behind it.

The history of celebrities being involved with cryptocurrencies can be traced to the early 2010s when the first cryptocurrency, Bitcoin, started gaining traction due to its increased adoption by various sectors, like e-commerce, hospitality, and some of the best Bitcoin casinos that we have today.

According to crypto expert Gary McLellan, online casinos were attracted to cryptocurrency due to the faster transaction times, the anonymity provided, and the lower transaction fees. A byproduct of this increase in adoption rates though was that Bitcoin saw its value increase. It comes as no surprise, then, that these sites are popular among high-stakes celebrity gamblers.

As Bitcoin's value increased, several celebrities including Mike Tyson and Ashton Kutcher, took notice and became early adopters. Tyson launched a Bitcoin ATM, while Kutcher invested in startups involved in Bitcoin-related activities.

Despite this, cryptocurrencies' big moment came in 2017, marked by a major boom in the markets. Bitcoin's price skyrocketed and new cryptocurrencies, also known as altcoins, were launched. This bullish market also saw a rise in initial coin offerings (ICO) that included celebrity endorsements as part of their marketing tactics. This included many celebrities like DJ Khaled, Floyd Mayweather, and Paris Hilton promoting ICOs on their social media platforms around this time.

Unfortunately, these celebrity endorsements were not without controversy. Most celebrities aren’t crypto or financial experts, they couldn’t identify which crypto projects weren’t legitimate, resulting in legal repercussions for some.

Despite this setback, many celebrities with disposable income were still drawn to the high-risk, high-reward ratio of cryptocurrencies. As a result, they started investing in cryptocurrency to diversify their portfolios beyond traditional assets like stocks, bonds, and real estate.

As for the psychology behind celebrities getting more involved in cryptocurrency, social proof is the main concept behind this increased interest. Social proof is a psychological concept that explains why people most likely follow the actions of others, especially if they see them as authoritative figures or admire them.

When a celebrity invests in cryptocurrencies publicly or endorses one, they inadvertently influence their followers to do the same. This usually results in all parties benefiting from the increased adoption as the token’s value increases.

Additionally, the decentralized nature of many cryptocurrencies aligns well with the anti-establishment views that some celebrities hold. The idea of not relying on traditional financial institutions and having more control over their wealth resonates with these individuals who see themselves as mavericks.

The emergence of non-fungible tokens (NFTs) has played a much bigger role in solidifying the relationship between celebrities and cryptocurrencies. NFTs, being unique digital assets stored on a blockchain, provide celebrities with a new avenue to monetize their fame.