All Those Celebrities Pushing Crypto Are Not So Vocal Now

In the latest commercial from the virtual currency exchange Crypto.com, titled “Bravery Is a Process,” the star basketball player Joel Embiid walks through Philadelphia while Bill Self, his former college coach, lends the narration.

“Even when our path didn’t make sense to everyone else, we kept going,” Mr. Self says in the ad, which made its debut on May 6. “We keep going, until our path is the one they wish they’d taken.”

What the ad doesn’t say: The crypto market is in the middle of a meltdown. Buyers beware.

Enthusiasm for crypto from Hollywood celebrities and top athletes reached a fever pitch over the past year. On social media, during interviews and even in music videos, they portrayed virtual currency as a world with its own hip culture and philosophy — one that was more inclusive than traditional finance and that involved the chance to make loads of money.

The Super Bowl was nicknamed the “Crypto Bowl” this year because so many ads — which cost as much as $7 million for 30 seconds — featured the industry, several of them starring boldface names.

But after investors watched hundreds of billions of dollars disappear in a sell-off this month, those famous boosters now face intensifying criticism that they helped drive vulnerable fans to invest in crypto without emphasizing the risks. Unlike clothes or snacks or many other products hawked by celebrities, the crypto market is volatile and rife with scams.

“This is real money that people are investing,” said Giovanni Compiani, an assistant professor of marketing at the University of Chicago whose research has found that younger, lower-income investors tend to be overly optimistic about crypto’s trajectory. “Those who promote it should be more upfront about the potential downsides.”

So far, crypto’s celebrity boosters have been largely silent about whether they have any second thoughts about their promotions.

Crypto.com declined to make Mr. Embiid available to discuss his partnership with the company. Matt Damon, who compared the advent of virtual money to the development of aviation and spaceflight in a critically panned but widely seen Crypto.com ad last year, did not respond to requests to weigh in. No word either from the basketball star LeBron James, who was featured in the company’s Super Bowl commercial this year.

Reese Witherspoon, an Oscar winner who declared online in December that “crypto is here to stay”, did not respond to a request for comment. Neither did Gwyneth Paltrow, another Oscar winner, who lent her name to a Bitcoin giveaway late last year.

Paris Hilton, who has nearly 17 million followers on Twitter who watch her coo over her lap dogs Crypto and Ether, stayed mum. Several other famous crypto pushers, such as Mila Kunis, Aaron Rodgers and Tom Brady, were quiet as well (although Mr. Brady’s and Mr. Rodgers’s profiles on Twitter still feature laser eyes, a popular symbol of Bitcoin bullishness).

Jimmy Fallon, who has discussed nonfungible tokens on the air, joked during NBC Universal’s upfront showcase for advertisers on Monday that he had to be involved in three separate shows because of Bitcoin. A representative for Naomi Osaka, the tennis star who became an ambassador for the crypto exchange FTX this year, wrote in an email that “she sadly is overseas and not available.”

In FTX’s Super Bowl commercial, the comedian Larry David denigrated important inventions such as the wheel and the light bulb before rejecting crypto. The ad winkingly urged viewers: “Don’t be like Larry.”

Jeff Schaffer, the director of that Super Bowl spot, said in an email that he and Mr. David did not have a comment on the market collapse.

“Unfortunately I don’t think we’d have anything to add as we have no idea how cryptocurrency works (even after having it explained to us repeatedly), don’t own it, and don’t follow its market,” he said. “We just set out to make a funny commercial!”

Crypto’s instability underscores a basic fallacy of celebrity marketing: A famous person’s endorsement may be memorable — the actor John Houseman’s spots for the Smith Barney investment firm decades ago are Madison Avenue legend — but it does not make the product being pushed inherently worth trying.

“This is what they do — they’re celebrities, they got offered money to promote something that has promise,” said Beth Egan, an associate professor of advertising at Syracuse University.

But it wasn’t without risk, Ms. Egan said. If the crypto industry had kept booming — or if it returns to its highflying status — the endorsers could be lauded. But if the downturn continues, their reputations could suffer.

“If I were Matt Damon or Reese Witherspoon, I would be questioning my willingness to take on this kind of gig,” she said.

In March, Crypto.com spent an average of $109,000 a day on digital advertising, according to estimates from the advertising analytics platform Pathmatics. In May, that has fallen to $24,669 a day.

Spending at FTX, one of the crypto companies that most aggressively used celebrity promoters, slipped to $14,700 a day this month from $26,400 a day in March, according to Pathmatics.

“We sort of created this arms race,” Brett Harrison, the president of FTX’s U.S. arm, said about the use of celebrity endorsers in an interview before the Super Bowl in February. Famous FTX brand ambassadors have included Mr. David, Mr. Brady and his supermodel wife, Gisele Bündchen, the golfer Albane Valenzuela, the football player Aaron Jones, the basketball player Stephen Curry and the baseball player Shohei Ohtani.

“We’ve planted our flag there and we have such great presence that racing to grab all of the remaining properties and athletes and celebrities is not necessarily our top priority,” he said.

But the company, which would most “likely spend a pretty significant amount more” on marketing, is now focusing on reaching different demographics and pursuing more low-key tactics, such as digital campaigns and Google ads, he said.

“We’re thinking of doing things a little bit differently than we were in the past,” he said.