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Little known a year ago, the privately owned Singapore company
ran a flashy Super Bowl ad alongside mega brands
https://www.reuters.com/business/
media-telecom/super-bowl-ads-are-moving-pandemic-with-humor-hope-2022-02-10
such as Budweiser, GM and Pringles, as well as rival crypto
platforms, in a push to dramatically grow its user base.
Other crypto platforms FTX, Bitbuy and eToro also ran Super Bowl
ads. But the game was just the latest publicity push from
Crypto.com.
Last year, it launched a $100 million advertising campaign
across 20 countries starring actor Matt Damon https://www.reuters.com/lifestyle/staples-center-los-angeles-be-renamed-cryptocom-arena-2021-11-17,
inked sponsorship deals https://frontofficesports.com/crypto-com-tops-400m-in-sports-deals-with-sixers-patch
with the Philadelphia 76ers, the Ultimate Fighting Championship
and Formula 1 Racing, and got 20 years of naming rights to the
former Staples Center. On Thursday night, the Crypto.com Arena
hosted the Super Bowl Music Fest.
Six-year-old Crypto.com is the brand name for a global group of
entities operating under the name Foris DAX. Its financials are
not fully public and Crypto.com has not disclosed its investors,
although it says it has no Wall Street backers.
Its aggressive marketing push has raised eyebrows. Some see it
as a sign the frothy crypto market is a bubble about to burst.
“There's a huge amount of money that is sloshing around the
system at the moment, and therefore, everyone is in land-grab
territory and looking for ways to put it to work,” said Adam
Shapiro, a partner at investment firm Klaros Group.
Founded in 2016 by Hong Kong-based entrepreneurs, Crypto.com is
the sixth-largest cryptocurrency exchange by daily volume,
according to researcher CryptoCompare. It has more than 10
million users but wants to reach another billion, and become a
top-20 global brand, its CEO Kris Marszalek has said.
Getting in front of everyday Americans through sports
partnerships is its strategy. Super Bowl advertising reaches
around 100 million viewers. Broadcaster NBC charges as much as
$7 million for 30 seconds.
“If you're reaching 150 million potentially in one event, it
could pay for itself pretty quickly,” said Paul Rogash, chief
executive officer of BetU, a crypto sports betting platform.
The crypto market had a dizzying year in 2021, as money flooded
in, pushing the value of all cryptocurrencies to more than $3
trillion
https://www.reuters.com/technology/
bitcoin-hits-new-record-crypto-market-cap-exceeds-3-tln-2021-11-08.
Crypto.com has tried to break ahead of the pack with
high-profile partnerships including one announced last month
with basketball superstar https://crypto.com/company-news/lebron-james-and-the-lebron-james-family-foundation-announce-multi-year-partnership-with-crypto-com
Lebron James of the Los Angeles Lakers who will play their home
games at the Crypto.com Arena.
Its commercial starring Damon, directed by Oscar-winning
cinematographer Wally Pfister, was so widely aired that South
Park parodied the ad in its Feb. 2 season premiere.
“The playbook they're playing is, we've got lots of cash. Let's
get our name out there,” said Robert Siegel, a lecturer at the
Stanford Graduate School of Business and a venture investor.
Crypto.com declined to comment.
CRYPTO BUBBLE?
The company started out as a crypto wallet and payment platform
named Monaco and in 2017 raised $25 million through an initial
coin offering. In 2018 it re-branded to Crypto.com and launched
an exchange in 2019.
Like its rivals, Crypto.com earns fees on transactions, as well
as on debit cards offered in partnership with Visa. It has a
$500 million venture arm that invests in crypto and blockchain
startups.
According to its website, the company has 3,000 employees
globally and has openings for 584 roles https://crypto.com/us/careers
in marketing, human resources, compliance, engineering and
business development, among others.
That staffing level is bigger than the 2,781 staff listed in the
most recent filing by the largest U.S. crypto exchange, publicly
listed Coinbase, which was founded in 2012 and has 72 million
users.
Last year, Crypto.com said it was expanding its institutional
client base, such as hedge funds and market makers.
Unlike Binance, Coinbase and other rivals with Wall Street
investors, Crypto.com says it has never raised institutional
funding. Marszalek told Bloomberg in January the company's
revenues grew 22-fold last year.
"They're probably making a lot of money at a time where a market
is insanely speculative," said Siegel.
Some compare the crypto spending-spree and Crypto.com's
breakneck growth to the dot-com bubble when several
overly-inflated tech companies went bust. These people have
warned that investors are likely to drop risky digital assets
when the U.S. Federal Reserve starts to raise rates
aggressively.
Cryptocurrencies have had a rocky start to 2022, with Bitcoin
tumbling under $40,000 for the first time since the fall.
Crypto.com is trying to position itself ahead of the pullback
and is spending whatever it takes to get there, said Mark Basa,
global brand manager at HOKK Finance, a crypto company.
“I think that they'll win that race," he added.
(Reporting by Hannah Lang in Washington; editing by Michelle
Price and David Gregorio)
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