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Earlier this year, it seemed like celebrities everywhere were promoting cryptocurrency and NFTs. But then, in early May, the markets crashed. WSJ’s Ellen Gamerman explains how celebrities got hooked on crypto in the first place, and how they’re responding now that the value of these assets is plummeting.

Further Reading:
Reese Witherspoon and Gwyneth Paltrow Push for Crypto Sisterhood 
NFT Sales Are Flatlining
Further Listening:
How An Art World Outsider Landed a $69 Million Sale 
This transcript was prepared by a transcription service. This version may not be in its final form and may be updated.
Jimmy Fallon: Ladies and gentlemen, please welcome Paris Hilton.
Ryan Knutson: In January, Paris Hilton went on The Tonight Show with Jimmy Fallon.
Ellen Gamerman: So she's in this lime green sparkly dress. She's talking about her wedding and the show, the reality show about her wedding on Peacock.
Ryan Knutson: She brought her little Chihuahua. She talked about her several wedding day outfits and she promoted her new business venture.
Jimmy Fallon: Forbes has named you one of the top 50 most influential people in the NFT space. So congrats on that.
Paris Hilton: Thank you.
Jimmy Fallon: You know what you're doing.
Paris Hilton: Thank you. I'm so proud. I love being part of this community and being a voice and sharing my platform and just getting the word out there.
Ellen Gamerman: And the two of them start talking about NFTs and the audience is pretty quiet. There's some scattered laughter, but you're not really sure if they know what they're laughing at or laughing about. It is a kind of baffling moment.
Ryan Knutson: That's our colleague Ellen Gamerman who covers entertainment. And like a lot of people, Ellen saw NFTs in crypto is a strange thing for a celebrity to endorse. Because at the time, NFTs were still a foreign concept to many people. And the particular NFTs they were talking about called Bored Apes, are also pretty darn expensive.
Ellen Gamerman: These apes sold for $350,000 on average and they were talking about it like it was no big deal. It was as if they were saying, "Hey, I got a Lamborghini." "Oh, you got a Lamborghini. I got a Ferrari." "Oh cool. We're part of the same community now." So it's not only impossible for most people to afford, but it's very precarious. So if you don't have money to burn or even if you do, this can represent a major financial risk.
Ryan Knutson: But Paris Hilton is not the only celebrity to endorse NFTs in crypto in recent months. As Ellen started paying more attention, she started seeing these endorsements everywhere.
Matt Damon: History is filled with almosts.
Ryan Knutson: Like when Matt Damon appeared in a ad during the Super Bowl.
Matt Damon: Fortune favors the brave.
Ryan Knutson: Or when Tom Brady did a commercial promoting another crypto exchange.
Tom Brady: FTX is the safest and easiest way to buy and sell crypto. It's the best way to get in the game.
Ryan Knutson: And here's Kevin Hart and Snoop Dogg talking about the rappers growing NFT business.
Kevin Hart: They use blockchain to trade and NFTs. Snoop, do you got NFTs? You got some, don't you?
Snoop Dogg: Yeah, I got some NFTs. I got my mind on my money and my money on my NFTs. I built the whole metaverse called, you know what I'm saying, the sandbox.
Ryan Knutson: There's also Lindsay Lohan and Kim Kardashian and LeBron James and Larry David and you get the picture. But in the last few weeks, the crypto and NFT markets have crashed. The party seems to be over and many celebrities have now gone quiet, which raises a few questions. What were all these celebrities doing? Why were so many jumping into crypto and NFTs? And what does it mean for them now that those markets are crashing? Welcome to The Journal, our show about money, business and power. I'm Ryan Knutson. It's Wednesday, June 15th. Coming up on the show, the messy relationship between celebrities and the chaotic world of crypto and NFTs. For a lot of people, cryptocurrencies and NFTs are seen as investments. In the last few years, their value has skyrocketed, but they're also volatile and not really regulated, which made our colleague Ellen wonder why someone like Paris Hilton would be interested in promoting NFTs. So in February, Ellen called her up.
Ellen Gamerman: Hello?
Paris Hilton: Hello.
Ellen Gamerman: Hi Paris, this is Ellen Gamerman from The Wall Street Journal.
Paris Hilton: Hello.
Ellen Gamerman: Hi, do you hear me okay.
Ryan Knutson: Hilton has been promoting NFTs or non fungible tokens. They're mostly photos, videos, or other digital artifacts that are bought and sold using cryptocurrency. People who buy them get a digital receipt that proves they're the sole owner. She told Ellen that for her getting into NFTs was mostly about the art.
Paris Hilton: Because there's just so many just incredibly talented artists who haven't got the recognition they deserve until now. I just think it's amazing with NFTs that people from all around the world, if they have a dream, they can make it possible through doing it this way with a blockchain and NFTs.
Ellen Gamerman: So your interest comes at it from an art perspective rather than an investment perspective.
Paris Hilton: Yeah, I look at it more from an art perspective. Obviously it's been amazing in a monetary way, but I don't think about it in that way. I think about it as just really pushing the space forward.
Ryan Knutson: But Ellen says there are other reasons why Hilton might be pursuing NFTs. In April of last year, Hilton's own NFTs reportedly sold for more than a million dollars in total. And Ellen says the NFT space is giving Hilton an opportunity to grow her brand.
Ellen Gamerman: NFTs are connected to her reinvention story and she wants to be seen in a different light and she wants to take back the narrative as they say.
Ryan Knutson: I see. So someone who's not just famous for partying, but someone who also has an NFT business.
Ellen Gamerman: Right. The queen of the metaverse, that's I think how she put it.
Ryan Knutson: As Ellen dove deeper, another name she came across was Reese Witherspoon.
Ellen Gamerman: Reese Witherspoon had a tweet that went viral because it was a little far out. She said in the near future, every person will have a parallel digital identity. Avatars, crypto wallets, digital goods will be the norm. Are you planning for this?
Ryan Knutson: Soon after that tweet, Witherspoon's media company, Hello Sunshine announced a partnership with the NFT collective World of Women. Witherspoon says she sees NFTs as not just a way to promote artists, but also as a good financial investment, especially for women. Here she is on a podcast called NFT Now.
Reese Witherspoon: I think it's a really interesting time to get involved. And that's why I keep encouraging more women into this space because it's already really carved out by a lot of men. As we know, empirically it's something dismal like 19% of crypto was held by women.
Ryan Knutson: Another A-lister who tied investing in crypto to feminism is Gwyneth Paltrow. Earlier this year, she was on a virtual panel hosted by another women's crypto group called BFF. The group's tagline is empowering a new age of friends who crypto.
Gwyneth Paltrow: I also think that there's a high probability that crypto will really be the future and even though some people still remain very skeptical, I think it's here to stay. And so there…
Ryan Knutson: It seems like a little bit of a strange thing to try to be on the vanguard of though. Like it's a weird technology, it's kind of hard to understand. It seems like there's probably some risks involved.
Ellen Gamerman: Yeah, there are a lot of risks involved. What the celebrities don't say is you should be prepared to lose a lot of money because that can happen. And it's also not always clear whether celebrities posts about crypto are pure enthusiasm or maybe they're getting paid and it's a promotion and that's been an issue. It's very hard to know how much of this is pure enthusiasm and how much of this is underpinned by the fact that they just received a free NFT that's super valuable or they're working with a crypto company.
Ryan Knutson: The thing that's so interesting to me is just how quickly it seemed like this all caught on. Suddenly celebrities everywhere were just obsessed with this stuff. Why do you think it caught on so quickly?
Ellen Gamerman: I think one big mover is the fact that Hollywood agents are all over this and they're advising their clients what to say about crypto, what to buy. And all the major agencies in Hollywood are building out this part of their business and have been for more than a year.
Ryan Knutson: We spoke with one of those agents in April. Her name is Kate Lonczak. She works for WME, a talent agency in Beverly Hills.
Kate Lonczak: In the beginning, a lot of clients called and asked what is an NFT. And I think now that we're probably about a year and a half from those conversations, the conversation has really shifted into, I know what an NFT is, I understand, but how do I get involved?
Ryan Knutson: Part of Kate's job is to connect celebrities with different crypto brands that are looking to partner up. She says that one of the reasons celebrities are promoting crypto and NFTs is the same reason they endorse any other product… They're paid to.
Kate Lonczak: Of course just like any company, any traditional financial company wants celebrity endorsement and celebrity backing and it's the same as these crypto exchanges. They want a face that says, "Hey, use this exchange." And we've definitely done deals in the endorsement space, but it's definitely been a meaningful source of business for us.
Ryan Knutson: But crypto and NFTs are new markets that for the most part are still unregulated. The crypto world can be pretty sketchy and she says she has a lot to watch out for.
Kate Lonczak: We do compliance checks. We also look and see if there's a notable backing, if there's a following and a community attached. We look at who referred us to the company. A lot of the times we get cold outreach from NFT platforms or from coins themselves and it's pretty easy to suss out which ones are scams and which ones are real.
Ryan Knutson: What's the ratio between bad offers and good ones?
Kate Lonczak: That's a good question. I would say the ratio between bad offers and good ones is probably like 70/30, 70 bad offers, 30% good offers.
Ryan Knutson: Does that make it difficult to be in this space and with NFTs and crypto and other things when you have a lot of stuff that might not be so great?
Kate Lonczak: It makes it entertaining to say the least. And I think a lot of when I say 70% bad offers, a lot of them we don't even get to the actual offer and proposal stage because we just won't waste our time to see what they can even offer our clients.
Ryan Knutson: Is there a risk to celebrities for being associated with cryptocurrencies though if the cryptocurrency crashes?
Kate Lonczak: I think that there's a risk if celebrities don't do their due diligence and actually look into what they're endorsing.
Ryan Knutson: A lot of fans are skeptical. Remember that cryptic tweet from Reese Witherspoon that Ellen mentioned earlier promoting NFTs? Ellen says some people in the replies weren't thrilled.
Ellen Gamerman: People wrote, you're scaring me. They were calling crypto a scam. They were telling her they were disappointed that not you two falling for this big scheme.
Ryan Knutson: Witherspoon was later asked about the reaction and said that if she listened to what other people said, she wouldn't have done half the things she's done in her career. But in some cases it's gone farther than just complaints on Twitter, like with Kim Kardashian.
Ellen Gamerman: She posted to her millions, hundreds of millions of Instagram followers, are you guys into crypto? This is not financial advice, but sharing what my friends just told me about the Ethereum Max token and it's hashtag ad. So we do know it's an ad and that was June last year. Then people start investing.
Ryan Knutson: In January, because of that Instagram post, Kardashian was sued as part of a class action lawsuit that claimed she promoted a crypto coin pump and dump scheme. The boxer, Floyd Mayweather and former NBA player, Paul Pierce also promoted the coin and were named in the same suit. None of the three celebrities or Ethereum Max responded to requests for comment. Despite the brewing concerns, Hollywood seemed to go all in on NFTs and crypto.
Ellen Gamerman: If NFTs are the future and if we're all living in some form of metaverse five years from now, then Hollywood is there. Hollywood is ready.
Ryan Knutson: But over the last month, this new market has started to crack. Cryptocurrencies have plummeted and many popular NFTs have lost a lot of value. How the celebrities that help drive the NFT crypto craze are responding, that's after the break. In early May, the crypto and NFT markets started to fall big time.
Speaker 15: Over the last 24 hours, the world of virtual currency known as crypto cash lost about $200 billion in value. Some are calling it the crypto crash.
Speaker 16: First of all, we saw the price of Bitcoin collapse by almost $5,000 or 15% in just a 24 hour period. As Bitcoin was collapsing, it took the entire overall cryptocurrency market down with it.
Speaker 17: This is a big test to that HODL mentality, the hold on for dear lifers out there that are currently in the crypto market.
Ryan Knutson: And NFT sales tanked.
Speaker 18: Well, it seems like only yesterday non fungible tokens are those NFTs were all the rage. Daily sales reportedly averaged 225,000 last September, but then this week, that number is down 92% to less than 20,000. Is the end already near for NFTs?
Ryan Knutson: Remember those Bored Ape NFTs that Paris Hilton and Jimmy Fallon were talking about? Their value has been slashed by half. At the same time, the crypto industry has seen a surge in lawsuits alleging that digital coins were hyped and sold under false pretenses often involving celebrity promoters. For example, the YouTuber turned boxer, Jake Paul and rapper Lil Yachty were sued in a pump and dump case similar to Kim Kardashians. Lawyers for Paul and Lil Yachty didn't respond to requests for comment. All this turmoil made Ellen want to reach back out to the celebrities she spoke to a few months ago before the crash.
Ellen Gamerman: I've reached out to Reese Witherspoon, Paris Hilton Mila Kunis, Gwyneth Paltrow, some beauty influencers who have big followings and were talking about NFTs just a little while ago.
Ryan Knutson: And what have you heard?
Ellen Gamerman: Well, I've heard nothing. I either got a decline to comment or just no reply. It was just striking that I couldn't get anyone on the phone.
Ryan Knutson: Can you talk about Paris Hilton? She was so eager to talk about it originally, but then what questions did you want to ask her now when you reached out?
Ellen Gamerman: I think I just would've wanted to talk with her and get a sense from the tone of the conversation of whether any of her love for NFTs in crypto was a little bit diminished, if any of her enthusiasm was down or if she was still going to be as bold and futuristic as she was in our phone call.
Ryan Knutson: On social media, Hilton still seems enthusiastic about NFTs and she's promoting projects on Twitter and Instagram. She isn't the only one that seems to be sticking it out. For instance, Snoop Dogg, Steve Aoki and Eva Longoria all recently spoke in favor of NFTs at a crypto convention in late May. Others though may be taking a step back.
Ellen Gamerman: The people like Paris Hilton who have latched onto crypto as a new identity, they're still busy out there and doing new things and talking about it. But if you're Reese Witherspoon, you're not talking about it as much, at least in what I've been able to observe on her social media. In fact, she used to have an NFT avatar, and now it's like a studio headshot, just a photograph of her. That seems like a telling detail about where everyone is right now.
Ryan Knutson: Even though Ellen wasn't able to get some of these artists on the phone, she was able to get a hold of some industry insiders who could give her a lay of the land.
Ellen Gamerman: And when I talk to Hollywood agents, they'll say what's happening now, it's not that they're not doing anything, they're just not talking about it. So the people who are in it are still engaging in it and they're undeterred. But where you're seeing some hesitance is in the deal making now, and agents will tell you that they are being even more cautious about the deals that they're looking into for their clients and they're just looking at those deals a lot more critically right now.
Ryan Knutson: We also checked in with Kate, the talent agent you heard from earlier. In an email she told us that she's still very optimistic. She said that even though the crypto market is currently on a down trend, crypto is a long game and she still believes that NFTs will continue to offer artists new storytelling and fan engagement opportunities. She calls the industry quote the next wave of the internet. And during our interview in April, she said that if celebrities do get into NFTs, it should be because they genuinely believe in it.
Kate Lonczak: I think if an artist is skeptical, if a celebrity is skeptical of the space and they don't know if they want to get into the space, then don't get into the space. I would advise against it. Because at the end of the day, a lot of celebrities that get backlash are celebrities that do things in the space that look like money grabs or the community knows that they don't fully believe in what they're doing, they're just in it for monetary reasons. So you really have to get engaged and involved with the community or else it's just going to backfire every single time.
Ryan Knutson: Ellen says some artists who have shown a real passion for NFTs and crypto have found some success. But as the market goes through a difficult time, she says it may become harder and harder to get fans on board.
Ellen Gamerman: When I was watching that BFF webinar, where there were Gwyneth Paltrow was on it, Mila Kunis was on it, and there was a feeling of get into it before you miss the boat. I think when you hear someone saying this is the next thing and I'm putting my money and my name into it, then fans might respond with their pocket books and actually invest real money. And I think some fans might have a little more skepticism when they see celebrities talking about how an NFT can be a status symbol, like a Chanel purse or something, like they're going to approach that with a bit more of a jaundiced eye. And I would think celebrities will be a lot more wary about financial products and attaching themselves to financial products. It was one thing when it was the next big thing and everyone was getting rich off it, but it gets very serious, especially in moments like this, like what is a celebrity doing attaching their name to any kind of market related asset. That seems really kind of strange to begin with. So I think even more strange now.
Ryan Knutson: This episode has been updated. A previous version incorrectly said Paris Hilton had sold more than a million dollars worth of NFTs earlier this year. She actually made those sales in April of last year. That's all for today, Wednesday, June 15th. The Journal is a co-production of Gimlet and The Wall Street Journal. Additional reporting in this episode by Paul Vigna and James Fanelli. Thanks for listening. See you tomorrow.
Kate Linebaugh is the co-host of The Journal. She has worked at The Wall Street Journal for 15 years, most recently as the deputy U.S. news coverage chief. Kate started at the Journal in Hong Kong, stopping in Detroit and coming to New York in 2011. As a reporter, she covered everything from post-9/11 Afghanistan to the 2004 Asian tsunami, from Toyota’s sudden acceleration recall to General Electric. She holds a bachelor degree from the University of Michigan in Ann Arbor and went back to campus in 2007 for a Knight-Wallace fellowship.
Ryan Knutson is the co-host of The Journal. Previously, he spent more than four years in the newsroom covering the wireless industry, and was responsible for a string of scoops including Verizon’s $130 billion buyout of Vodafone’s stake in their joint venture, Sprint and T-Mobile’s never ending courtship and a hack of the 911 emergency system that spread virally on Twitter. He was also a regular author of A-heds, including one about millennials discovering TV antennas. Previously, he reported for ProPublica, PBS Frontline and OPB, the NPR affiliate station in Portland, Ore. He grew up in Beaverton, Ore. and graduated from the University of Oregon.


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