Initial coin offerings (ICOs) are becoming increasingly popular. So much so that celebrities are now starting to endorse them. This new trend is being pushed by Crypto Media Group, a new company that seeks to hire celebrities to help promote new ICO campaigns.
The company is very recent, having only been created approximately one fortnight ago. However, it already struck a deal with Floyd Mayweather, the undefeated boxing champion. Some of the people who’ve seen his recent tweets, promoting new ICOs like Hubii Network and Stox, may have wondered how the boxing athlete got involved with cryptocurrencies and ICOs in the first place. Now we know that it was a marketing campaign orchestrated by the Crypto Media Group.
Logan Schauer, CEO of the company, wants celebrities to be the face of cryptocurrencies. In a new interview for Vice he stated:
“Our goal is to take [the ICO market] from this very small industry of cryptocurrency-focused investors and take it to the masses… we want to help the market transition from where it is now—word-of-mouth spreading through the crypto community—and we want to bridge that gap to the mainstream world.”
Schauer also shared his hopes for legitimizing the ICO market, stating that the Crypto Media Group will only be working with trustworthy projects:
“If we’re going to do a deal with an ICO, it’s because we like them and we think it’s feasible”
The ICO landscape
The digital token market has made an enormous progress since its inception. Every year, there are more projects and more money entering the market. Last year, major ICOs raised a total of over $103 million. These figures exclude the infamous DAO project who solely raised $150 million, but was hacked soon after the ICO ended. By exploiting a software vulnerability, the hackers were able to get away with one-third of the funds raised, leading to the inevitable demise of the project and subsequent ETH/ETC chain split.
Although hacks are still a regular occurrence, they don’t seem to be affecting the growth of ICOs in any visible way. 2017 has been yet another year of unprecedented growth, with the Tezos blockchain project gathering a record breaking $232 million worth of Bitcoin and Ether.
With so much money being funneled into ICOs, it seems to have sparked the interest of world governments. The US Securities and Exchange Commission (SEC) released a statement this July announcing that digital tokens may soon be regulated and confined to the definition of securities. The Canadian Securities Administration (CSA) also declared similar intention just a few days ago in a staff notice. It seems that a clear regulatory and taxing framework for ICOs may be in the near future.
Marketing digital tokens is not a new strategy. The developing teams generally reserve a fraction of coins for stakeholders who market and publicize their projects. So, it’s no surprise that some of the money is being poured into larger marketing campaigns. It’s still early to tell if celebrity endorsements will have a beneficial impact on cryptocurrencies, but what seems certain is that crypto’s are not a closed-off niche anymore.