It looks like the celebrity promotion of Initial Coin Offerings (ICO) will not be coming to an end any time soon. Jamie Foxx is promoting CobinHood ICO which began on September 13th. Foxx has 4.81 million twitter followers, giving him huge outreach on first and secondary contact from his post. Right off the heels of Floyd Mayweather promoting Centra Card ICO (the third ICO he has promoted), this is just another celebrity taking advantage of the red hot ICO seen. We have yet to see the SEC step in and prevent this blatant pumping of ICOs. 50 Cent nearly got in trouble for pumping H & H Imports, a penny stock back in 2011.
At the time there are no regulations in crypto, making it the Wild West. It seems the SEC is waiting for a case where investors seriously get hurt, which can happen very easily in crypto as we've seen with previous cases like the Mt. Gox exchange collapse, causing hundreds of millions of dollars worth of Bitcoin to be lost.
Crypto Community Reaction
Jamie's tweet Monday opened him up the dark side of crypto to say the least. The tweet attracted a lot cryptocurrency enthusiast to his page and they left some interesting remarks to say the least. Many in crypto think it is complete baloney when a celebrity comes out and promotes an ICO. Here are their thoughts:
My favorite by far is this one though:
For those who don't know, RobinHood is the popular stock trading app that has no trading fees. It goes to show that the developers behind this ICO didn't put much thinking or ingenuity into their name, CobinHood. "An exchange with zero trading fees." Sounds very similar to the RobinHood app...
This is just another classic example of find a problem, apply an ERC-20 token to it and sell it to people saying it will solve these problems while making you wealthier at the same time. I stress everyone to do their due diligence when investing in cryptocurrency. It is a very easy place to get burned. And although nearly all ICOs have had positive returns, that doesn't mean that won't change.
ICOs don't seem to be coming to an end any time soon, as I noted in a previous article a few days ago. If you look at ICO Alert, there are hundreds of ICOs left in the pipeline this year. You can expect to keep seeing celebrity promotion along with increases in the price of Ethereum as more people buy it for ICOs. There is a caveat though, as we saw back in June when Ethereum prices crashed due to ICOs dumping their ether in exchange for fiat, so they could pay bills and have a stable currency.
The flood gates are opening and now it seems nearly everyone has heard of Bitcoin, but most altcoins are still in the dark. Expect to see cryptocurrency to become more mainstream as we see more celebrities promoting it, seeing the benefit of getting coins at major discount and easy way to make money off their following.
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Disclaimer: This is not investment advice, always do your own research. It is very important to do your own analysis before making any investment based on your own personal circumstances.