It’s been a harrowing few weeks for anyone tracking the Nasdaq or the S&P 500. But look to the land of cryptocurrencies — you know, the decentralized economy that’s supposed to be safely cordoned off from the volatile world of centralized banking and act as a reprieve to rapidly inflating fiat currencies — and you’ll find a state of play that’s equally precarious. If not a whole lot worse.
One figure in particular tells the story: ad spending. After making a big Super Bowl splash, major crypto firms are now punting on their advertising campaigns.
Misfortune Favors the Brave
Bitcoin’s price has plummeted roughly 70% since Matt Damon declared “Fortune Favors the Brave” in an October 2021 commercial for exchange marketplace Crypto.com, and roughly 60% since the company officially gained the naming rights to the stadium formerly known as the Staples Center on Christmas last year — a deal believed to be worth $700 million, which would make it the most expensive stadium naming rights deal in sports history. In fact, since Bitcoin’s all-time peak in November last year, the broader crypto-economy has witnessed a nearly $2 trillion market wipeout, according to recent accounting by The Wall Street Journal.
Unfortunately for celebrity endorsers like Damon, Larry David, and Lebron James, major crypto firms are unsurprisingly slashing their marketing budgets to weather the perhaps-cataclysmic storm. Apparently, it costs a little too much old money to convince new users to buy some new money:
- Since Bitcoin’s November peak, overall digital ad spending by major crypto firms like Coinbase, Gemini Trust, and FTX Trading has dropped even more than the price of bitcoin itself — at least 90%, market-research firm Sensor Tower told WSJ on Monday.
- Crypto.com’s spending has fallen from $40 million during its Super Bowl lead-up in January to just $2.1 million in May; Gemini’s has dropped from $3.8 million in November to under $500,000 in May. Coinbase has mostly halted ad spending since its popular $31 million “floating QR code” Super Bowl ad crashed its site, but actually slightly increased ad spending last month to mock crypto doomsayers — bitcoin has fallen nearly 50% since May 4.
Regulators, meanwhile, are preparing perhaps the final death knell for this era of crypto ad spending: a recent PSA campaign from the SEC is warning amateur investors of heeding advice from celebrity crypto endorsement.
The Bit Short: One financial firm — the Bethesda, Maryland-based ProShares — is now effectively allowing investors to bet against the bitcoin craze, with its Short Bitcoin Strategy ETF soon to trade on the NYSE. Hey Matt Damon, how do you like them apples?