Ruth Saldanha: Earlier this month, celebrity Kim Kardashian was fined more than US$1 million for advertising Ethereum Max on her Instagram page. Now, the reason is, she didn’t disclose that she had been paid $250,000 to promote the cryptocurrency, which is now worth, well, next to nothing. This brings up an interesting question. In a space as new as crypto, how should investors spot scams or even undesirable investments? Madeline Hume is a Senior Research Analyst at Morningstar and is here today to tell us.
Madeline, thank you so much for being here today.
Madeline Hume: Thanks so much for having me, Ruth.
Saldanha: Cryptocurrencies are still developing and there aren’t many research reports available on which one can base one’s decisions. So, how should investors decide what coins or currencies they should buy?
Hume: Yeah, it’s a tricky question to answer right now in crypto. Somewhat similar to cryptocurrencies themselves, the research on cryptocurrencies is still highly decentralized and distributed across a variety of sources. Surprisingly, one of the most common areas where investors do their research for cryptocurrencies is social media. That’s why some of the advertisements like the one that Kim Kardashian made are so highly effective because people are already looking for investment insights on crypto.
There are pros and cons to the approach that crypto assets have taken and the investors in those assets have taken with regards to posting ideas and things like…