Crypto and Super Bowl LVI

Learn for yourself

Jimmy Butler, a popular Miami NBA player, recently went to Twitter with a video aimed at the audience of Super Bowl 56. “On February the 13th, some of the biggest names are going to be telling you to get into crypto.” He goes on to say “trust yourself” and “do your own research”. However, this video is in partnership with Binance. The message Butler is sending across rings true, you should do your own research. It still needs to be noted though that he is getting paid for this and it is still an ad, not something he’s doing purely out of the good of his heart. No shade thrown, I really like Jimmy Butler.

Binance also got popular Colombian singer J Balvin to make a similar video. Both celebrities put up this website at the end of their videos cryptocelebalert.com. The website has an FAQ with typical questions people will ask such as: What is Bitcoin? What is cryptocurrency and how does it work? Etc. In both videos they mention February 13 and how there are going to be “a lot of big names telling you what to do”. For example, Matt Damon recently was recently in a Crypto.com commercial. These videos are a sign, Binance knows what’s coming, and that’s a crypto filled Super Bowl.

Exchange advertising

Popular crypto exchange FTX is doing a big Bitcoin giveaway based on how late their commercial airs. So if it airs at 8, then they’ll give away 8 BTC to four different people. FTX currently has a partnership with MLB, where they added patches onto the umpires uniforms. Crypto.com also purchased a 30 second ad slot for $6.5 million. Crypto.com has been steadily increasing their partnerships over the last couple years. In the end of 2021, the Staples Center changed its name to the Crypto.com Arena. These two companies have spent a small fortune on increasing brand recognition, specifically in sports.

FTX and Crypto.com aren’t the only crypto companies spending big on advertising. Back in October Coinbase made a major advertising partnership with the NBA and WNBA. Coinbase also has a major partnership with NBA star Kevin Durant. It isn’t officially confirmed that Coinbase will be airing an ad in the Super Bowl, but I see it as more than likely. They need to keep up with rival exchanges, and they’re also launching a Coinbase NFT platform soon.

Super Bowl XXXIV

The Super Bowl played in January 2000, St. Louis Rams vs Tennessee Titans, saw a similar bout of new tech advertising. The dot-com bubble was at its peak before this Super Bowl, and dot-com companies spent millions to secure advertising spots. I found a New York Intelligencer article that shows some of the cringey early 2000s internet ads in full swing. Super Bowl XXXIV could be considered the peak of the dot-com bubble. In the weeks after the game aired some companies saw an initial uptick in website visitors or revenue, but still ended up losing money because they spent too much on advertising, without enough profit to make it worth it.

The dot-com bubble saw lots of new age tech stocks get overvalued because of the rapid growth of the internet industry. Most of the inflated prices were due to speculation, and many of the companies like Pets.com, LastMinuteTravel.com, Computer.com, etc. became obsolete only a matter of months after this Super Bowl. A small number of companies advertised are still up and running today, like WebMD and MicroStrategy, but the vast majority have been liquidated, bought and absorbed, or simply disappeared off the face of the Earth.

A lot of these companies, like LifeMinders.com, are only remembered for their cheesy Super Bowl ads, and not for what their company actually did. I’m not saying crypto is going to end up deflating like the dot-com bubble. However, I do think that some assets are overvalued for their current use case, but I don’t think the entire industry is a bubble ready to pop. Keeping that in mind, it still is hard to ignore the similarities between this current emerging industry and the dot-com era. Millions spent on advertising, sometimes excessive hype, and increasing interest rates.

On top of all that, the dot-com bubble burst in 2000 around the time Alan Greenspan, former chair of The Federal Reserve, raised interest rates several times. In 2022 it is expected that the Fed will raise interest rates several times starting in March. I mean come on, increasing interest rates, huge industry advertisements, and an emerging type of technology. The similarities are all there.

What might actually end up happening

It would be naive of me to make a 1:1 comparison between the dot-com era and the current crypto industry. Yes, the similarities exist. On the other hand, social media has allowed people all over the world to benefit from and learn about crypto. On top of that, it has formed strong communities with individuals who are diehard believers in digital assets, whether it be a certain asset or a more broad belief. These crypto platforms like Crypto.com, FTX, and Coinbase, have massive followings and userbases with money invested. That’s not going to disappear overnight.

The most likely outcome of all this advertising in the Super Bowl is a temporary inflation in crypto prices. This is going to be the most mainstream publicity crypto has received, ever. People who have never heard the word “Bitcoin” in their entire life are going to see these new investing platforms advertised to them, and will be naturally intrigued. This Super Bowl is very bullish for crypto, at least in the short term. Then again, it is important to keep an eye on the bigger picture. Just because it’s being advertised on national television doesn’t make it a good investment, as the dot-com bubble has showed us. The most important thing, like Jimmy Butler said, is to trust yourself and do your own research.