Sports and crypto are closely linked, with the Morning Consult reporting that sports fans are twice as likely as others to say they are familiar with cryptocurrency and two thirds of cryptocurrency investors being men.
However, the glitzy commercials featuring male celebrities that used to grace our screens – like the one for crypto exchange FTX featuring seven-time Super Bowl-winning quarterback Tom Brady using a flamethrower to thaw a block of ice containing a Bitcoin or the time-traveling ad for Crypto.com featuring NBA star LeBron James – have now disappeared.
Actor Matt Damon’s pitch to invest in cryptocurrency has also fizzled out. ISpot.tv Inc., a company that measures TV ads, reports that the commercial for Crypto.com in which Damon uses the famous phrase “fortune favors the brave” last aired during the Super Bowl in February.
It was part of a four-month $65 million national campaign whose spending exceeded that of other investment services such as Vanguard and Fidelity during the same period of time. These days, however, Damon is being mocked on social media, with users pointing out in June that those who took Damon’s advice to buy into cryptocurrencies last fall would have seen their holdings drop in value by two thirds.
This sea change in marketing comes at the same time as a huge sell-off in Bitcoin and other cryptocurrency assets. Spending by big cryptocurrency trading platforms such as Coinbase, FTX and Crypto.com dropped to $36,000 in July, a huge drop from the high of $84.5 million recorded in February. In a shareholder letter this month, Coinbase announced that it is scaling back its paid media after its second quarter revenue dropped 64 percent.
Cryptocurrency crashes, high-profile bankruptcies and scams are shaking investors' confidence
Bitcoin has lost around half its value since March as a slew of high-profile bankruptcies shake investors’ confidence and reduce trading volumes. Increased scrutiny by regulators around the world has also left some investors scared. The sector's total market value dipped below $1 trillion this June after hitting a peak of $3 trillion late last year.
The Director of Business Intelligence for industry research company Advertiser Perceptions, Eric Haggstrom, warned: “Ad sellers shouldn’t expect growth in this vertical the remainder of the year due to the crash in crypto valuations and emerging allegations of fraud among companies in the crypto market.”
He added: “Crypto has been a boom and bust industry since its inception, and advertising budgets will follow the same trajectory.”
Experts believe that if some of these major firms decide to start advertising on TV again in the future, they will likely do so with a much different message. In the past, splashy ads featuring celebrities were used during major sports events that played to people's fear of missing out. In the future, however, experts suggest that the focus of ads will be on education as new and existing crypto users recover from the bear market.
Last week, major cryptocurrency exchange Coinbase reported a 63 percent decline in revenue, losing more than $1 billion the second quarter of this year amid a crypto market crash that forced them to lay off hundreds of employees. A series of experimental cryptocurrency ventures have collapsed recently, while the prices of several leading digital currencies have also crashed. With new scams and collapses continuously coming to light, there doesn’t appear to be an end in sight to the industry's meltdown.
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