Crypto sits out the Super Bowl after a miserable year
Well, that was fast.
Less than a year ago, as the Rams and Bengals duked it out on the SoFi Stadium gridiron for Super Bowl LVI, more than 100 million viewers were met with ads promising a chance to hop on the wave of the future: cryptocurrencies, nonfungible tokens (or NFTs) and a frothy ecosystem of blockchain-ified digital commerce.
LeBron James did a promo for the Crypto.com trading platform. Coinbase, another crypto exchange, spent $14 million on a QR code gimmick. And who could forget that Larry David ad suggesting that crypto was an invention on par with electoral democracy and the wheel?
It was a bold marketing play so eye-catching that people called the event “the Crypto Bowl,” even before the game took place. And yet, this year crypto was almost entirely absent from the proceedings. Fox Sports’ executive vice president of ad sales, Mark Evans, told the Associated Press before the game that there would be “zero representation” from crypto during the broadcast.
“It’s definitely a positive that there won’t be any celebrity-backed crypto ads in this year’s Super Bowl,” said Bonnie Patten, the executive director of consumer watchdog organization Truth in Advertising, in an email. “If the past 12 months have taught us anything, it’s that consumers should not be taking investment advice from celebrity endorsers.”
It’s an impressively fast reversal, but hardly a surprising one.
In the time since Los Angeles hosted the last Super Bowl, the wider crypto economy — which includes digital currencies, tradeable digital artworks and a grab-bag of other online assets — has sunken into an undeniable slump.
The crypto market entered a protracted decline around the middle of last year (although bitcoin did enjoy a small rally in January). Coinbase and other crypto firms are laying people off. NFT sales are shrinking. Major industry players, such as Celsius, Luna and Three Arrows Capital, have collapsed, while others, such as the developer behind the crypto-centric video game
“Axie Infinity,” faced repeated scandals. Hacks and scams continue to inundate the space; a regulatory backlash seems either imminent or already here.
Perhaps the most visible example of crypto’s fallen prestige, however, is the spectacular downfall of FTX, the same crypto exchange David (of HBO’s “Curb Your Enthusiasm” fame) framed last time around as a turning point in human civilization.
FTX filed for bankruptcy in November, and its ex-Chief Executive Sam Bankman-Fried — once seen as a wunderkind — now sits under house arrest while facing federal money laundering and fraud charges. (Bankman-Fried has pleaded not guilty.)
“The FTX collapse has left a stigma on the industry, even though much of FTX’s alleged fraud is what I would refer to as plain vanilla fraud,” said Josh White, an assistant professor of finance at Vanderbilt University and a former financial economist at the Securities and Exchange Commission. “This stigma is leaving them facing high scrutiny from regulators and Congress … so the decline in ad spending is prudent.”
The era of famous people endorsing crypto apps is likely over for the foreseeable future, White added via email. (When the crypto market was better, you could find Jimmy Fallon and Paris Hilton showing off NFTs on late night TV, or Post Malone and the Weeknd dropping crypto references into a music video.)