Celebrity Bitcoin Ads Mirror Subprime Mortgage Crisis

If you’ve lost a lot of money trading cryptocurrencies over the past few months, I wonder how you feel about the wealthy celebrities (mainly in the US) who have encouraged you to jump into it.

Reese Witherspoon has marketed crypto, as has Gwyneth Paltrow, Larry David (his ad has the benefit of being a bit funny), Paris Hilton (not funny), Matt Damon (funny but not meant to be funny) and Kim Kardashian – among many others. But the bit of marketing I’ve found most irritating so far comes from Gisele Bundchen and Tom Brady (I wouldn’t rate it as not funny at all on any level).

In an ad for FTX, Brady can be seen calling a multitude of people (let’s call everyone, he says) encouraging them to get into the crypto markets one way or another. Are you there? he asks her. I’m in, they say. I bet they wish they weren’t. There was a small bounce this week, but none that does much to mitigate Bitcoin’s 70 percent decline from its highs in November of last year.

You may be wondering why this is the most irritating ad. The answer is that the majority of people Brady calls don’t look like they can afford to lose as much money as he does (one of the lucky recipients of his advice is his plumber), and the whole thing reminds me little too concerned about the subprime crisis. Think of the part towards the end where every low-income person in the US got convinced that they could both hit the man and make a quick buck by buying a bunch of shoddy homes and flipping them.

The celebrity bitcoin ads marked the same part of the cycle – and once again, those less able to hit take it. Most of the bankers and fund managers who made the subprime bubble possible were fine. The owners of the apartments were not. Giselle and Brady look good. Those with undiversified portfolios who specialize in crypto all too often fail.

bear the losses

The only benefit (and I’m expanding here) is that there is some gain if losses materialize to offset against future gains over the next four years. If you do so, remember that you are not allowed to buy back that asset within 30 days (although you could buy another cryptocurrency if you wish – they appear to be moving together) and that you must notify HMRC of the loss for it to be admissible is.

You will be wondering where the future profits I mentioned will come from. That makes sense; There’s a lot of bad news at the moment (see this week’s Magazine for why a recession is all but certain, for the failings of central banks to prevent them, and for details on the staggering levels of public debt around the world).

But maybe not everything is bad. Matthew Lynn argues that recession has long-term benefits. There’s also a bit of good news for retirees: pension rates are rising a bit, so if you’re looking to swap your savings for long-term guaranteed income, you’re now getting more bang for your buck than you did last year. Those who are far from retired should also rejoice: with global stock markets down about 20%, they too are getting more bang for their buck. Finally, check out the story of Vitalik Buterin, the crypto guru who thinks that anyone interested in crypto for the long term should also “embrace a bear market.” I assume he won’t claim his losses for tax purposes.

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