Recently, it was announced that the LeBron James Family Foundation had formed a partnership with the cryptocurrency exchange site Crypto.com. That partnership, James said, will give student’s in the foundation’s I Promise program and their families “access to the tools and educational resources needed to participate and succeed in building Web3, the future of the internet.” James also added, “Crypto.com and I are aligned on the need to educate and support my community with the information and tools they need for inclusion. I’m looking forward to working with them to bring these opportunities to my community.”
We’ve previously highlighted LeBron’s belief in the not-quite-proven medical benefits of wine consumption. And now, it would seem LeBron believes that the most pressing need for the underprivileged children of Akron, Ohio is an education in investing in cryptocurrency and its blockchain technology framework. And he’s apparently lent his name and endorsement to a sketchy, foreign-based company so that his non-profit foundation could provide just that.
If the name Crypto.com sounds familiar, it’s likely because it’s been in the news lately. Maybe you heard about the cryptocurrency exchange site’s purchase of the naming rights to what was formerly the Staples Center in Los Angeles, home of NBA’s Lakers and NHL’s Kings. Or perhaps you read about Crytpo.com in the cyber crime news, when it was reported that hackers had stolen $30 million in cryptocurrency from the Singapore-based firm.
To add even more irony to the LeBron James Family Foundation agreement with Crypto.com, the deal was announced just days after prices of all the major cryptocurrencies nosedived, costing investors over $200 billion in value. To many, that price plunge highlighted the danger of the average Joe investing in something he may not fully understand based on the advice – and endorsement – of highly paid athletes such as Tom Brady and Odell Beckham, Jr.
If you’re one of many people who need an understanding of cryptocurrency like the kids in LeBron’s foundation, think of it like this; Like diamonds or baseball cards, cryptocurrency is an asset with a finite quantity. The difference, however, is that cryptocurrency exists only in digital form. So, instead of a quarter in your pocket or $20 bill in your wallet, cryptocurrency is essentially a monetary asset that’s represented by a code in a database and stored in “digital wallet.”
The original cryptocurrency, Bitcoin, was designed as a form of decentralized currency. As such, it was built to allow the transfer of value from point A to point B without the delay needed to clear through the financial institutions that would be involved in a traditional transaction. However, in spite of its original intent, cryptocurrency has initially turned into an investment vehicle prone to wild swings in value. That volatility comes from the fact that, unlike real estate or stocks, there’s no way to accurately put a value on cryptocurrency. As such, most financial advisors preach caution and suggest that would-be cryptocurrency investors risk no more money than they can afford to lose.
When you add it all up, the optimist says that LeBron James is lending his name to Crypto.com to allow the kids in his foundation to be on the cutting edge of technology. On the other hand, the cynic may believe that’s a fancy way of saying that LeBron has a lucrative endorsement deal that he’s framing as an altruistic endeavor for the kids of Akron. The truth may even lie somewhere in between. But the fact of the matter is that LeBron’s endorsement of Crypto.com will ultimately convince a lot of people to invest their hard-earned money in something they may not fully understand. Remember that Lebron may be a master of the slam dunk, but crypto is hardly a slam dunk investment. LeBron James can afford to lose a significant amount of money on a volatile, risky investment like cryptocurrency. Can you?