Crypto owners differ from other investors in how they gather information about potential investments, a survey conducted by the business intelligence firm Morning Consult has revealed. In particular, celebrity endorsement of cryptoassets appears to weigh heavily when crypto holders make their investment decisions.
45% of the surveyed crypto owners said they would buy a particular cryptoasset if a celebrity endorsed it. This figure is compared to just 20% of the respondents who identified as investors in general – including crypto holders – saying the same.
The high number of crypto holders who said they would follow a celebrity’s advice was in a Morning Consult report put into the context of a now-infamous Instagram post by the popular influencer and reality TV star Kim Kardashian.
In the post, Kardashian promoted the fairly unknown and almost worthless altcoin EthereumMax (EMAX) to her 255m followers, mainly by suggesting an affiliation with a boxing match between Floyd Mayweather and YouTuber Logan Paul on June 6.
Following the post from Kardashian, where she asked her followers to “join the Ethereum Max community,” the head of the UK’s financial watchdog, the Financial Conduct Authority (FCA), came out and warned the public against investing in tokens promoted by influencers:
“I can’t say whether this particular token is a scam, but social media influencers are routinely paid by scammers to help them pump and dump new tokens on the back of pure speculation. Some influencers promote coins that turn out simply not to exist at all,” FCA chair Charles Randell said in a speech at the time.
Despite the clear warning from regulators, however, nearly one in five of those who said they saw the post, also said they invested in EthereumMax after seeing it, the survey found.
Equally surprising, perhaps, was a finding from shortly after the Instagram post was published, that about 20% of the entire US adult population – assuming the survey is representative – said they had heard about the post. Among existing crypto holders, the share was even higher, with 31% saying they knew about the post.
The findings in the survey show the incredible reach that some online celebrities have, including the reach they have into the crypto markets, and particularly in regards to smaller altcoins.
“When seeking out information about investing generally, crypto owners differ from other investors even more,” said the firm. Crypto owners are more likely to go to more sources for investing information than general investors, such as social media and investment apps such as Robinhood or Betterment.
Crypto owners tend to be younger, and younger investors are also more likely to say that social media has impacted their financial decisions, Morning Consult noted, summarizing their findings.
“Investment leaders will need to remember that although financial advisors are still a trusted source of advice, they’re competing with more sources of information for crypto investors’ mindshare,” they concluded.
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