You might not associate celebrities with the world’s financial rmarkets, but there have been cases where a famous person’s word or actions have caused a huge impact on different areas such as stocks or cryptocurrencies.;
Hyping Cryptocurrency and Other Digital Asset Endorsements
As the cryptocurrency market is largely driven by market sentiment rather than some sense of intrinsic value, hype has played a role in the price swings seen on tokens like Bitcoin and Litecoin. The list of celebrities who’ve endorsed crypto in the past includes Connor McGregor, Elon Musk, and Floyd Mayweather, with the boxer being hit with a fine by the U.S. Securities and Exchange Commission a few years ago for backing a new token without disclosing all of the details.
Non-fungible tokens (NFTs) are other digital assets whose prices have been greatly affected by celebrity influencers. For example, the Bored Ape NFT collection rocketed in value when Eminem paid $460,000 for one, while Madonna and Mark Cuban are other owners of these expensive assets.
We can also see the celebrity influence reach into areas such as digital land. Snoop Dogg is one example, as this long-time crypto fan has been involved in several web3 projects and helped to raise awareness of the idea of virtual land, when he bought digital real estate in The Sandbox to develop a virtual reality Snoopverse. This led to someone paying a reported $450,000 to buy land next to his, as the idea of becoming a virtual neighbor to a star became a possibility.
Stocks and Shares Can Be Affected Too
A star’s attitude towards a company can also affect their value on the stock market, as Cristiano Ronaldo proved to the world in 2021. During a press conference, the Portuguese soccer player pushed away a bottle of Coca-Cola and put a bottle of water in its place. The effect on the soft drinks company’s stock price was immediate, as it fell from $55.71 to $55.22 in a matter of hours and then kept falling.
How can investors benefit from price increases or drops like this? The Infinox website confirms that forex, commodities, and indices are among the instruments that retail investors can trade using the MetaTrader 4 and 5 platforms. The use of contracts for differences (CFDs) is also explained, as a way of taking advantage of price swings without actually buying the asset in question.
We mentioned Elon Musk regarding crypto earlier, and the billionaire Tesla founder has affected the price of Bitcoin and Dogecoin with his public announcements, causing both price rises and falls at different times. The effect on Tesla shares was even more dramatic when Musk said their price was too high, leading to a $14 billion drop in the value of the company and a $3 billion loss on his own stockholding.
These examples confirm that celebrities from different walks of life can use their influence to affect prices in diverse financial markets. It’s one of the most intriguing aspects of modern investing and something that anyone interested in investing needs to be aware of.