How the mighty have fallen.
Cryptocurrency companies stole the spotlight during the 2022 Super Bowl, with commercials from a handful of newcomers to America’s biggest advertising stage: FTX, Coinbase, Crypto.com and eToro. Some marketers dubbed it the “Crypto Bowl.”
A year later, this sector has been humbled by a massive drop in cryptocurrency prices, as well as the bankruptcy of several well-known companies.
The drastic turnaround evokes what happened in 2000, when dotcom companies such as Pets.com paid for ads in the Super Bowl, only to go bankrupt within a year or two.
This year, cryptocurrency companies are “not represented in any way,” said Mark Evans, executive vice president of ad sales for Fox Sports.
Here’s a look at the cryptocurrency companies that advertised in last year’s Super Bowl and where they are now:
FTX: BANKRUPT.
The cryptocurrency exchange platform was one of the biggest advertisers at last year’s Super Bowl, with commercials featuring comedian Larry David. Although at the time FTX was the second or third largest cryptocurrency exchange site, it did not operate a sizable business in the United States.
Ten months after the Super Bowl, FTX was in bankruptcy. The Bahamas-based company collapsed after investors began withdrawing their deposits due to concerns about its financial statements. FTX filed for government bankruptcy protection on November 11.
FTX founder and CEO Sam Bankman-Fried was arrested and charged with defrauding customers of billions of dollars. His trial will begin in October.
David, along with other celebrities such as star quarterback Tom Brady and basketball star Stephen Curry, was named in a lawsuit alleging that the fact that they were celebrities makes them guilty of promoting the firm’s failed business model.
CRYPTO.COM: HUMILIATED
Although Crypto.com is still operating, the company is significantly less healthy than it was a year ago.
The Singapore-based company announced in January that it was laying off 20% of its staff, in addition to layoffs implemented by the end of 2022. Crypto.com also revealed that a significant portion of its assets were tied up in low-quality cryptocurrencies such as the Shiba Inu Coin.
Like FTX, Crypto.com attempted to make a name for itself through sports sponsorships. The company spent $700 million for the naming rights to what used to be the Staples Center, where the Los Angeles Lakers play. It is now called Crypto.com Arena. The company’s Super Bowl ad featured basketball superstar LeBron James, with the tagline, “luck favors the brave.”
Crypto.com indicated that its layoffs were due to a “confluence of negative economic developments,” but its CEO put a significant portion of the blame on FTX’s downturn.
COINBASE: IN LEGAL TROUBLE
Coinbase had one of the strangest ads at last year’s Super Bowl, which featured a floating QR code that would lead users to a promotion in which the company was giving away millions of dollars worth of cryptocurrencies. Marketing experts felt it was one of the most successful ads of the game, as it surprised people and stood out, although many viewers found it confusing.
Coinbase is publicly traded, and its shares have fallen more than 70% since the game last year. At a time when digital currencies like bitcoin are plummeting, the company has seen exchange revenues dry up, as investors have been shying away from acquiring cryptocurrencies in general.
The company has also announced layoffs equivalent to approximately 20% of its workforce, and its CEO has said they are preparing for what they are calling “a crypto winter.”
Additionally, Coinbase has attracted the attention of U.S. regulators. The company had to pay $100 million to settle an investigation by the state of New York into whether it was allowing users to open accounts without first conducting proper background checks. The Securities and Exchange Commission is also examining whether it will ban the industry practice known as “staking” – a process in which owners of cryptocurrencies use them to upgrade the related blockchain, and in return receive additional coins_, which had been big business for Coinbase in the past.