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New research from the University of Nevada, Reno College of Business and Vanderbilt University explores how celebrity endorsement affects an initial coin offering’s (ICO) success. Similar to initial public offerings (IPO) in stock, ICOs raise funds to develop things like a platform or business by issuing a new cryptocurrency before it is traded on an exchange. Dr. Sean Wilkoff, assistant professor of finance at the University of Nevada, Reno, and Dr. Joshua T. White, assistant professor of finance at Vanderbilt University, previously researched the role of media coverage in the non-fungible tokens (NFTs) market and decided to explore the role of celebrity endorsements in the ICO market. The researchers wanted to find if endorsement works as a substitute for other demand-driving events for cryptocurrencies, such as a presale, if celebrity endorsement increases the overall amount of funds raised and if ICOs with celebrity endorsements had a higher likelihood of being scams. “The media is seen as reputable, and our research found that media reporting on NFTs educated investors about the NFT market,” Wilkoff said. “With celebrity endorsement, it’s a different story because celebrities are not defined solely by their ability to provide reputable financial advice.”
Full research : College of Business explores impact of celebrity endorsement of cryptocurrency.
