Celebrity Influencers Might Mislead Investors, Says European Union

Celebrity Influencers Might Mislead Investors, Says European Union

Key Insights

  • The European Union (EU) passes a new law on crypto influencers.
  • Crypto influencers now need to disclose the risks associated with investments in the crypto market.
  • More countries to follow similar rules soon.

With the ever-expanding crypto market came crypto influencers, who played a vital role in promoting the market. These influencers revolutionized the crypto market through celebrity advertisements, urging individuals to invest in cryptocurrencies for huge returns.

But how true is that in reality? Is it as rosy as the celebrity influencers project? The United Kingdom seems quite skeptical about the role of crypto influencers.

Uncertainty in the Crypto Market

While several traders invest in crypto tokens expecting huge returns, the market's current condition indicates the potential to lose several billion dollars.

With the gradual decline in Bitcoin prices and the collapse of FTX and Celsius, it seems the crypto market is witnessing quite a turmoil. No wonder investors lost several billion dollars because of their investment decisions.

Of course, one could hardly predict the sudden bearish trend amidst a bullish market. Thus, expert investors are now looking for alternative strategies and investment plans to overcome their previous losses and rule out similar chances in the future. 

How Do Celebrity Influencers Impact Investors? 

While expert investors are already looking for alternative buying and purchasing strategies, novice investors seem to be driven by celebrity influencers. Their outstanding marketing strategies often leave a long-lasting impression on investors who make investment decisions without enough market research and rationale.

In short, investors on their way to following their celebrity idols make investment decisions that might push them toward greater losses in the future. 

Most financial experts claim celebrity influencers are crucial in promoting the crypto market to push investments. However, they fail to create enough awareness about the risks and challenges of the market.

The European Union introduced a new set of crypto regulations known as MiCA laws to combat this grey area. The law requires crypto influencers to disclose the risks in the crypto market alongside promotions. Following the EU, Singapore also resorted to a similar framework, which barred celebrity influencers from promoting investments. 

Role of Entrepreneurs

One can't blame celebrity influencers alone. Instead, entrepreneurs who grew into social media sensations also have a similar role. Let's consider the Tesla CEO Elon Musk and the sudden spike in Dogecoin when his Twitter acquisition plans went viral.

The meme coins price spiked by a whopping 23% to 0.1677 in a fortnight. Not to forget the exceptional influence Chanpeng Zhao had on Bitcoin prices soon after he announced recovery plans for FTX. 

While several entrepreneurs and celebrity influencers advertise the pros of the crypto market, it seems they often forget their target audience.

Naturally, the die-hard fans leave no stone unturned to copy their idols or even believe what the influencers promote without cross-checking.

However, it is time influencers responsibly advertise on the crypto market to prevent investors from losing several billion dollars. 

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