Last fall, Matt Damon made the decision to become the face of Crypto.com and promote cryptocurrencies. He is not the only artist to have given financial advice, it has always existed: we still remember Catherine Deneuve who, in 1987, promoted the Suez bank. The following week Suez stock would crash. Is the “lynching” of Matt Damon on twitter justified?
When the People give financial advice
Artists and VIPs from all sectors, the famous People who are also called “influencers” today have always given financial advice, for benefits or money. In her time, Catherine Deneuve had received €400,000 to advertise for the Suez bank, the share price of which would collapse the following week. To promote the merits of the Crypto.com cryptocurrency platform, Matt Damon received a million dollar donation for his non-profit foundation Water.org. We could cite others: Elon Musk of course with his unconditional support for Dogecoin (DOGE) from which we do not know if he derives any benefit from it, Mc Afee and his support for XVG (Verge) and other coins more or less doubtful. James LeBron has also partnered with Crypto.com and Larry David for FTX. Is this their role? And why are they expected?
Manipulation, cognitive biases and advertising
We are not going to analyze the human brain here, but just perhaps explain how advertising and propaganda use cognitive biases to encourage us to make sometimes irrational decisions, to lose all critical sense, to be emitted. Fashion effect, daily propaganda, assertions of an authority, there are very many cognitive biases. In the case of Matt Damon or other stars, it is called the “halo effect”: a person judged positively beforehand (charm, personal success, etc.) will be more naturally followed. This is how an actor is legitimized to give investment advice, a journalist medical advice or a youtuber advice of all kinds. No qualification is required in the field in question: only the halo effect will come into play.
Matt Damon ad: ‘Fortune favors the brave’
Advertising for Crypto.com with Matt Damon had already caused a lot of ink to flow at the end of 2021. In a more or less subliminal message, Matt Damon makes us understand that by buying cryptocurrencies (on the site in question), we will be part of , like him, innovative people. Even the famous cartoon South Park made fun of him. The actor may not be qualified to talk about cryptocurrencies (and still maybe if?), but in any case it seems that he does not derive any personal benefit from this operation since it will be used for his foundation non-profit (improving access to drinking water in the world).
First-time investors are firing red balls at Matt Damon
As the cryptocurrency market plunges, hapless investors lash out at Matt Damon. As with every crash, you have to find a scapegoat. We also think of Elon Musk, sued following the Dogecoin (DOGE) plunge.
Why does it make no sense to look for a scapegoat?
First of all, when you invest money, you don’t do it as a result of an advertisement, because a salesperson in a suit and tie or an “influencer” praises the merits of a product (financial or other). Then because we invest for the long term without hoping to make x50 in a week. Investors must also have multiple reliable sources to get a clear idea of the validity of their choice: many have lost on the stock market, in real estate or in cryptocurrencies. There are scams or just bad choices, which are not the same thing. Matt Damon, against a donation for his foundation, praised the merits of a legal platform, there is in itself no scam. What investors bought next is absolutely beyond his control, nor is he responsible for the crash. It’s also a safe bet that these same investors would not have reversed anything in the foundation if they had earned a lot of money…
First-time investors who are currently experiencing the stock market and cryptocurrency crash are in a panic and are looking for scapegoats. Yet they knew that the markets are cyclical and there is nothing serious, especially if we make wise choices and are patient. The panicked investors of 2017 could have made a huge profit on bitcoin (BTC) just by waiting a few years.
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Subprimes, financial crises, galloping inflation, tax havens… Bitcoin was designed for more transparency and perhaps finally change the situation. I try to understand this new environment and try to explain it myself. The road is undoubtedly long, but it is worth it.