The current bursting of the crypto bubble could be something more significant than a resetting of the Jenga pyramid. And that could be causing crypto companies to curtail their cash devoted to the games we play.
Via the New York Post, cryptocurrency companies are reducing their sports spending. For example, crypto exchange FTX recently has exited talks to fund a jersey patch for the L.A. Angels. An FTX deal with the Washington Wizards also fell through, per the report.
FTX has splurged on deals with the likes of Tom Brady. The company also dropped plenty of real dollars for a Super Bowl ad featuring Larry David.
As noted by the Post, other crypto companies that have spent many millions for sports sponsorships have recently undergone financial struggles. Crypto.com, which paid for the naming rights at the venue previously known as Staples Center and which gave the world the Matt Damon “fortune favors the brave” commercial, recently laid off 260 employees.
Also, Coinbase paid roughly $14 million for a one-minute Super Bowl ad, and it also became the NBA’s exclusive cryptocurrency platform partner. It has laid off nearly a fifth of its workforce, and its shares are down 75 percent this year.
Brady, whose 2.7-million follower Twitter feed has become nothing but an extended advertisement for the growing array of stuff he wants you to buy, last mentioned FTX on Twitter nearly three weeks ago, with an ad touting the ease of using the FTX trading platform.
Yes, it’s easy to use it. It’s also easy to lose money on it. Because way too many people think it’s easy to get rich on it.
Whatever label is applied, it’s not difficult to spot the grift. The more people who buy these currencies, the higher the price climbs. Then, when those who bought low begin to sell high, the price drops. More take their profits. More get nervous. And as they dump their holdings, the price drops, leaving those who got in at the peak holding the bag.
Then it starts all over again. People who understand the market will “buy the dip,” hopeful that the price will recover to the point at which they can sell the peak, inevitably sparking another dip from which they’ll buy. And so on. And so on.
Yes, someone is getting rich from crypto, starting with those who know when to buy and when to sell. And those who get in and get out too late are having their money end up in someone else’s pocket.