For many people across America, seeing the multitude of crypto Super Bowl commercials in 2022 was confusing. Many were certainly questioning what this new technology was and whether it would last. But for investors who had been watching the crypto market beforehand, it likely came across as jarring more than anything. The ascent of crypto’s popularity can only be likened to the dot-com bubble of the early 2000s, or the infamous “tulip mania” centuries ago.
As these examples suggest, the hype for crypto certainly didn’t last much longer. Prices were already in decline before the day of the Super Bowl, but things took a turn for the worse shortly thereafter. Just as many Americans were introduced to this new category of investing — and as many decided to make their foray into the space thanks to the hype — the market shaved off over $1 trillion. Moreover, projects soon started imploding left and right.
The aggressive push of crypto into the mainstream was poorly timed and poorly received. The crypto Super Bowl commercials from 2022 are a prime example of the market’s hubris. Four different companies aired commercials during America’s biggest sporting event: FTX, Crypto.com, Coinbase (NASDAQ:COIN) and eToro. These companies, at the time, represented some of the most prominent names in the industry. With the decline of crypto prices and the collapse of a number of projects, though, things are changing rapidly.
What has happened to this bunch since their multi-million dollar bets on the Super Bowl?
FTX Implodes After the Crypto Super Bowl Commercials
Of the big four crypto exchanges to air an advertisement during the game, FTX is definitely the most well-known. And, as many know, that’s not for any good reason. In fact, the company is rapidly becoming the de facto cautionary tale against trusting crypto companies altogether.
The company’s Larry David-starred commercial was perhaps the most-talked-about of the pack. David is depicted throughout history, voicing skepticism at the invention of some of the world’s greatest marvels of engineering — the lightbulb, the wheel, the Sony Walkman. The ad ends with David being pitched on crypto, to which he gives a simple “nah.”
It is an effective advertisement when it comes to stoking urgency in its audience. However, those who maintained their David-like attitude were best rewarded. Nine months after airing the commercial, FTX became the subject of one of the biggest financial scandals of the 21st century. Revelations of fund mismanagement, obfuscating of internal communications and general ineptitude of the highest degree has brought the company to its knees — and founder Sam Bankman-Fried to prison.
As it stands now, those unlucky enough to put their funds into FTX have likely been unable to recover them. The company has been entered into bankruptcy court and its new CEO — the same crediting expert who was tasked with liquidating Enron — has been peeling back the layers of corruption publicly. Sam Bankman-Fried faces 115 years in prison and his peers have taken plea deals to help indict the disgraced entrepreneur.
Crypto.com’s Post-Super Bowl Struggles
No other company on this list has had it quite as badly as FTX, but Crypto.com is certainly not fairing the crypto winter well. Its ad features NBA star Lebron James lecturing a younger version of himself, saying “If you want to make history, you’ve got to call your own shots.”
It’s an apt collaboration. After all, Crypto.com shelled out an eye-watering $700 million for naming rights to James’ current home arena in Los Angeles. Unlike James, however, the company has been less successful at calling its own shots in the time since, especially when under pressure. Investors continue to see smoke coming from Crypto.com’s offices. The company recently axed a whopping 20% of its workforce. This follows late 2022’s wave of layoffs, which saw 260 employees get let go. Employees also say the company fired hundreds more behind closed doors.
Adding fuel to the fire are Crypto.com’s adversaries. Binance (BNB-USD) CEO Changpeng Zhao has called Crypto.com’s mass movement of assets in late 2022 “a clear sign of problems.” It’s unsurprising for companies to badmouth competitors. But that same sentiment has been echoed by a significant number of crypto venture capitalists and finance pundits. Comparisons between CEO Kris Marszalek and Sam Bankman-Fried have not been helped by reports rehashing the controversial end to Marszalek’s previous company, Ensogo.
Crypto.com is a private corporation, making it hard to place just how badly the company struggling. However, if its Cronos (CRO-USD) token is any indicator, it’s definitely on the skids. CRO is down 80% year-over-year (YOY). Its market capitalization has fallen to around $2 billion.
What the company does have going for it is user growth. Throughout crypto winter, Crypto.com continues to bring in users. In November, the company surpassed 70 million active users.
Coinbase Suffers After Crypto Super Bowl Commercials, But Holds Much Power
Coinbase didn’t go for laughs or big-name cameos like other crypto Super Bowl commercials did last year. Rather, the company opted for simplicity. The bouncing QR code that populated viewers’ TV screens for 59 seconds changed colors occasionally. That’s about it. The code itself, when scanned, took viewers to a page offering $15 in Bitcoin (BTC-USD) as a bonus for signing up for the exchange.
From some perspectives, the commercial was easily the most successful of all these crypto ads. More than 20 million viewers scanned the code — so many people that the traffic crashed the app.
Yet, for all of this buzz, COIN stock has been almost entirely in decline since the commercial aired. Trading for around $200 per share in February 2022, Coinbase seemingly showed the proof the world needed that crypto was a booming enterprise here to stay. Today, though, shares trade at just $71. In terms of market cap, COIN has shrunk to $18 billion. It expects a more than 50% YOY decrease in revenue this year.
Like others, Coinbase has tried to tread water by shedding its workforce. In mid-2022, it fired 18% of its staff. In January, Coinbase fired another 20%. Yet, fiscal turmoil continues to find the company in new ways, like the $100 million penalty it recently received from the New York Department of Financial Services.
Coinbase’s struggles should be extra-interesting and extra-concerning to the crypto faithful more so than others. Indeed, it retains an interesting role as the world’s largest staker of Ethereum (ETH-USD). Experts at blockchain security player CertiK say this market dominance could prove problematic for the future of blockchain. The company could very well be pushed to censor transactions by the U.S. Treasury Department. CEO Brian Armstrong says Coinbase will shut down staking before censoring the blockchain, but there’s a possibility Coinbase reneges on this promise to appease shareholders. It’s simply a game of wait-and-see.
eToro: No SPAC Deal to Speak of, but Less Bloodshed Than Peers
eToro rounds out the pack of crypto companies that threw out advertising to the masses via crypto Super Bowl commercials last year. And in the aftermath of its milquetoast ad spot, the company is seeing the mildest volatility of the bunch. Its diversity of offerings has spared eToro much of the same troubles that have plagued peers.
The only thing eToro is guilty of is being boring. Indeed, its Super Bowl ad spot is the least interesting of the bunch — it depicts people floating throughout a city in a bird-like murmuration. Ultimately, it fails to be neither funny nor especially odd, at least by Super Bowl commercial standards.
While most of the crypto commercials last year leaned into the FOMO aspects of crypto investing, eToro stayed more in line with its Wall Street-accepted stock brokerage peers. Crypto was simply an added bonus to the “community investing” offering eToro advertises.
In the end, not leaning too hard on the crypto side of its business model might’ve been what saved eToro from suffering as much as its peers. Indeed, eToro’s first seven years of existence only allowed its users to copy trade. Crypto has been a secondary venture for the company, with it only adding the investments in 2014.
Being a stocks-first, crypto-second trading application may have saved it from the worst of the mid-summer crypto implosion and the FTX meltdown. However, this company is still a fintech player. It did not get off lightly as the bear market swept every corner of the investing world.
Most recently, eToro lost out on its chance to join Coinbase as a publicly traded crypto exchange. In mid-2022, eToro saw its plan for a special purpose acquisition company (SPAC) merger with Fintech Acquisition V come to an end. Factors outside of either’s control kept the deal from going through. This came after the two companies agreed in December 2021 to delay the merger. At the time that delay was announced, eToro’s valuation dipped from around $10 billion to $8.8 billion.
Crypto Marketers Shuffle Plans After Crypto Super Bowl Commercials
The fallout of the crypto market has been unkind to all. But, crypto marketers have had to get especially crafty in the wake of 2022’s storm if they want any chance of attracting new clientele. In the last several months, crypto advertising has become less about the FOMO and community of the Super Bowl crypto commercials. Now, marketers are focused on simply distancing themselves from the bankrupted peers that have shattered trust in the entire system.
Companies like Binance, Coinbase and Crypto.com are taking pains to try and prove to investors that they aren’t like FTX. In fact, Binance has tried to prove this beyond a shadow of a doubt with its transparency audits. That plan has backfired a bit, however; several concerning red flags have been raised and auditors have abandoned the partnership.
For other companies still choosing to push onward with bullish promises, things are still complicated. On Tuesday, news broke that no crypto commercials will be permitted to air during Super Bowl LVII. Two companies have reportedly already paid for their ad space, filmed and finished their commercials. Two others were very close behind. All were set for spots during the game just before the FTX crash had occurred.
All told, it seems some more time for reflection is necessary before Super Bowl airers will be comfortable opening up to crypto ads again.
On the date of publication, Brenden Rearick did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.