The Super Bowl curse comes for crypto
The 2000 NFL championship game was named the “Dot-Com Super Bowl” when around 20 of its hugely expensive ads were bought up by tech companies – many of which had disappeared by the time the game aired – which did not survive the 2001 crash.
To borrow a line from another sport, it’s deja vu again, and the Super Bowl dot-com seems to be targeting crypto now.
Example: Among the $6.5 million advertisers for 30 seconds during Super Bowl LVI was a 60-second ad for Coinbase, which crashed under the weight of viewers tuning in. This morning (June 14), CEO Brian Armstrong announced that the company was cutting 1,100 jobs – around 18% of its workforce – as the Nasdaq-listed company’s share price crashed along with the price of bitcoin. and other cryptocurrencies.
See also: Bitcoin’s potential as ‘digital gold’ loses luster as prices tumble
Then there’s Crypto.com, which cut 5% of its workforce, or 260 employees.
While stock and crypto exchange Robinhood didn’t advertise in the 2022 Super Bowl, it coughed up $5.5 million in 2021. It just cut 9% of its staff — and really, the curse also hit him last year, as the ad ran during the company’s marketing meltdown around the r/WallStreetBets – Gamestop stock trading halt, in which he accused of favoring large clients over small ones to save a hedge fund.
Read more: Next congressional hearing scheduled for Robinhood-GameStop debacle
That’s not to say that every Super Bowl 2022 crypto exchange advertiser succumbed to the curse with layoffs. FTX and eToro have not announced any headcuts. Neither did Binance, which technically didn’t advertise in the Super Bowl itself, but ran a huge campaign around the game.
Other US exchanges with jobs on the cutting floor include BlockFi, which announced it was laying off around 20% of its employees – about 400 in total – as well as Gemini, which cut 10%.
Latin American stock exchanges were also hit hard. Latin America’s largest stock exchange, Bitso, cut 10% of its workforce, Argentina’s Buenbit cut 45% and Brazil’s Mercado Bitcoin laid off 80 employees.
blood in the water
That said, all have been hammered by the crypto bloodbath that began in November and redoubled in early April. The downward march has been steady since the start of the second quarter, bitcoin at $46,000 saw it briefly drop below $21,000 this morning (June 14) – down 24% since Friday and 55 % in the second trimester.
Bitcoin has now given up all of its 2021 gains and there is a real possibility – even a probability – of it falling below $20,000, possibly even below the 2017 high of $19,783.21 set. during the first crypto boom.
The No. 2 cryptocurrency, Ethereum, fell 70% in the second quarter, briefly dipping below $1,100 on June 13 before bouncing back above $1,200 today. With very few exceptions, the 50 largest cryptocurrencies by market cap have fallen 40% to 70% this quarter.
The problem, as Coinbase’s Armstrong explained during the Nasdaq-listed company’s first quarter investor call on May 11, was that while crypto price volatility is good for cryptocurrency exchanges , because people buy and sell more when prices are changing rapidly, it only works when volatility is going in two directions.
Of course, he also said that even though Q1 2022 results fell, bear markets are “a big opportunity because…we tend to be able to pick up great talent during those times.” [while] others pivot, they get distracted, they become discouraged.
See also: Coinbase may be unfazed by 80% drop, but investors are clearly shaken
Derivatives exchanges are also hitting
It is not just spot exchanges that directly trade cryptocurrencies for retail and institutional investors. Crypto derivatives exchanges are also hurt with their customers.
Crypto futures investors saw more than $1 billion in liquidations on June 13, as falling crypto prices forced positions to be closed as traders were hammered by margin calls.
More than half of these liquidations affected bitcoin traders, while an additional $317 million affected Ethereum investors. The Solana blockchain, a competitor of Ethereum, was third with $20 million in liquidated positions, according to CoinDesk.
Beyond that, there were indications that a growing number of traders closed their positions, which would suggest that they are expecting increased volatility – likely on the downside.
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