This article will explore the impact of the celebrity effect on the cryptocurrency industry during this cycle, focusing on the mechanisms of its formation.

Written by: Jeffrey Ding, Chief Analyst at HashKey Group

Cryptocurrencies are always associated with various celebrities. Previously, there was Bitcoin under the "Trump Trade," and later, Elon Musk established the Department of Government Efficiency (abbreviated as DOGE), which caused the price of DOGE (Dogecoin) to skyrocket. Emerging market fund manager Mark Mobius stated while trying to extinguish the public's enthusiasm for cryptocurrencies, "Cryptocurrency is a religion, not an investment."

While there is indeed a certain cult of personality surrounding cryptocurrencies, the term religion may be too high a view of cryptocurrency. This article will explore how the celebrity effect is formed and its impact on the cryptocurrency industry during this cycle.

Religious Myth and Cult of Personality

According to Émile Durkheim's "The Elementary Forms of Religious Life," religion is a unified system of beliefs and practices related to sacred things, which are distinguished and prohibited. These beliefs and practices unify all who adhere to them into a moral community called the church. On one hand, we see that coins directly endorsed by celebrities deify the status of the celebrities, especially the influence of the founders on the coin. On the other hand, Bitcoin is different; in its early days, the mystery and symbolism of "Satoshi Nakamoto," the absentee godhead, directly elevated Bitcoin to a "divine creation" status. Today, Trump is becoming a contender for the role of "Bitcoin Jesus," leading the market.

However, we believe that cryptocurrencies exhibit a cult of personality, akin to the "myth" of religion. The cult of personality surrounding cryptocurrencies is actually fervor or belief, rather than religion.

Cryptocurrencies do not have sacred things that distinguish and prohibit taboo violations, nor do they have "rituals" to reinforce the community. This article will briefly describe how the transition from cult of personality to celebrity effect occurs in cryptocurrency.

Even if you consider cryptocurrency to be a religion, allow us to quote religious studies scholar Russell McCutcheon: "What is worth studying is not what religion is or is not, but the process of 'making it' itself," such as "the process by which a group asserts claims about their own actions and institutions," namely how cryptocurrency enthusiasts assert the cult of personality.

Formation Mechanism of the Celebrity Effect

Charismatic Leadership

German sociologist Max Weber defined charismatic leadership (also known as charismatic authority) in "Economy and Society" as "the extraordinary qualities of a person that are considered sacred, heroic, or exceptional, and the compliance with the behavioral patterns they exhibit." Charismatic leadership is based on the leader's "extraordinary personal traits, magical insights, or achievements that attract followers' loyalty and obedience."

For example, with Elon Musk, followers worship not only his resume but also the sense of mission created through projects like promoting new energy vehicles and exploring outer space. As a result, followers believe that supporting Musk is supporting human progress. A survey by global consumer research platform Piplsay shows that 37% of American adults invest based on Musk's tweets.

After following charismatic leaders, people will reinforce their belief in the celebrity through a series of self-verification.

Self-Verification

According to William B. Swann's self-verification theory, people continuously seek or elicit feedback that is consistent with their self-concept to maintain and reinforce their existing self-concept, thereby gaining a sense of control and predictability over the external world.

Especially in the highly volatile cryptocurrency trading environment, traders have already self-hypothesized, "I understand how to grasp the volatility of this market." Coupled with their following of charismatic leaders, they can be said to have assumed, "I understand how to interpret the 'prophecies' of the 'gods'." When the cryptocurrency market price rises as the celebrity says, the individual's self-verification is further reinforced. Even the Federal Reserve resembles a "temple," where people engage in self-verification through various interpretations of "Archbishop Powell's" ambiguous statements regarding future monetary policy.

Moreover, the near "divine" belief in celebrities, combined with external opposition, especially in a polarized situation, further strengthens personal worship. For instance, during the U.S. election, due to "Kamala Harris" (Democratic presidential candidate) not proposing favorable policies for cryptocurrencies initially, even when she later expressed a positive attitude, it was not as strong as Trump's. Polarization further amplified Trump's celebrity effect, leading to extreme market enthusiasm after his election.

Once the cult of personality is formed, how does psychological activity translate into market behavior? This requires an explanation through the theory of bounded rationality.

Bounded Rationality

Bounded rationality was initially proposed by Kenneth Arrow, who believed that human behavior is "consciously rational, but this rationality is limited." Human rationality is limited due to environmental uncertainty, meaning information sources are incomplete; due to limited cognitive and computational abilities regarding the environment and information; and because people often process information using the first signal system (real, concrete stimuli such as sound, light, electricity, taste, as opposed to the second signal system of language and text).

Faced with the vast and complex cryptocurrency market, people tend to simply believe in "deified" charismatic leaders to reduce decision-making costs. The movements of celebrities become the most significant source of information for followers, making following the trend the optimal solution when making investment choices based on the information pool.

These deified leaders are further divided into different tiers due to the information echo chambers created by advanced social media. From well-known figures like U.S. President Trump and "Iron Man" Musk, influencing billions of users globally, the tokens associated with them can rise dramatically based on their slightest actions and words; down to a KOL with a few thousand followers, who shouts out an unknown token in their "wealth group," leading everyone in the group to like this wealth code.

Everyone has their own "god."

This is especially evident in meme coins. People are unwilling to think through complex investment logic and asset value; they prefer to immerse themselves in the wealth fantasies and anxieties brought by so-called KOLs, engaging in similar collective behaviors within various information echo chambers. Through the call of celebrities, the essence of what people worship may have transcended a specific individual, becoming an animal, a popular symbol, or a story that has been "deified" online.

At this point, the cult of personality has formed.

Value and Risks of the Celebrity Effect

Short-term Catalysts for Explosive Growth

On one hand, the celebrity effect has a short-term promotional effect on cryptocurrencies.

Celebrity endorsements can increase the exposure of certain assets. In an age of information explosion, public attention holds immense value, and attracting potential investors' attention is the foundation for good performance in the secondary market of assets.

Having celebrities endorse cryptocurrencies can significantly boost market sentiment and attract new capital inflows, leading to short-term explosive growth.

For example, Trump's return to the White House and unprecedented support for Bitcoin as a U.S. reserve asset instantly raised market expectations, contributing to market growth. The market value of Dogecoin surged from obscurity to hundreds of billions, largely thanks to Musk's unwavering support. Especially for meme coins, if the "deification" is successful, the explosive potential should not be underestimated.

Over-Binding Amplifies Risks

On the other hand, there are risks associated with binding cryptocurrencies to specific projects. First, over-binding to particular celebrities may amplify risks. While the celebrity's halo can bring opportunities to cryptocurrencies, they can also introduce risks; the traffic attracted by celebrities may accelerate the outbreak of crises. For instance, if a celebrity finds themselves in an unfavorable position, it may lead to panic selling among holders. Secondly, even if a celebrity does not face a downfall, it does not guarantee long-term value; the potential of the ecosystem itself determines long-term value, and whether it can attract sustained inflows and interactions of long-term capital is the real issue.

After short-term capital inflows, if the celebrity effect fades, the evaporation of value will be a severe blow. You can easily imagine what would happen to DOGE without Musk.

From Unipolarity to Multipolarity

So how can we leverage the celebrity effect to better capture its benefits for cryptocurrencies?

We believe that the development form of communities and projects should shift from unipolarity to modularity and multipolarity. Initially, strong leading figures can help establish a solid traffic foundation; in the later stages, a DAO (Decentralized Autonomous Organization) format is more suitable, effectively reducing risks while maintaining effective leadership and promoting the healthy development of the cryptocurrency ecosystem. Of course, to complete this transition, projects will need to undergo a period of growing pains, and those that can succeed will be the truly valuable investment targets.

免责声明：本文章仅代表作者个人观点，不代表本平台的立场和观点。本文章仅供信息分享，不构成对任何人的任何投资建议。用户与作者之间的任何争议，与本平台无关。如网页中刊载的文章或图片涉及侵权，请提供相关的权利证明和身份证明发送邮件到support@aicoin.com，本平台相关工作人员将会进行核查。