The NFL’s 2000 championship game was named the “Dot-Com Super Bowl” when some 20 of its hugely expensive ads were bought up by tech companies — several of which were defunct by the time the game aired — that didn’t survive the 2001 crash.
To borrow a line from another sport, it’s déjà vu all over again, and the dot-com Super Bowl seems to be gunning for crypto now.
Case in point: Among the $6.5-million-for-30-seconds advertisers during Super Bowl LVI was a 60-second ad for Coinbase, which crashed under the weight of viewers who logged on. This morning (June 14) CEO Brian Armstrong announced the company was cutting 1,100 jobs — about 18% of its workforce — as the Nasdaq-listed firm’s stock price collapsed along with the price of bitcoin and other cryptocurrencies.
See also: Bitcoin’s Potential as ‘Digital Gold’ Loses Luster as Price Plummets
Then there’s Crypto.com, which cut 5% of its workforce, 260 employees.
While stock and crypto exchange Robinhood did not advertise in the 2022 Super Bowl, it did cough up $5.5 million in 2021. It just cut 9% of its staff — and really, the curse hit it last year as well, as the ad ran during the company’s marketing meltdown around the r/WallStreetBets — Gamestop share-trading halt, in which it was accused of favoring big clients at the expense of small ones to rescue a hedge fund.
Read more: Next Congressional Hearing Set For Robinhood-GameStop Debacle
This isn’t to say all of the 2022 Super Bowl’s crypto exchange advertisers have succumbed to the curse with layoffs. FTX and eToro have not announced any head cuts. Nor has Binance, which didn’t technically advertise in the Super Bowl itself but ran a huge campaign around the game.
Other U.S. exchanges with jobs on the cutting floor include BlockFi, which announced it was laying off about 20% of its employees — about 400 altogether — as well as Gemini, which cut 10%.
Latin American exchanges have also been hard hit. Latin America’s largest exchange, Bitso, cut 10% of its staff, Argentina’s Buenbit cut 45% and Brazil’s Mercado Bitcoin let 80 employees go.
Blood in the Water
That said, all have been hammered by the crypto bloodbath that began in November and redoubled at the beginning of April. It’s been a steady downward march since the second quarter began, with bitcoin at $46,000 saw it briefly fall below $21,000 this morning (June 14) — down 24% since Friday and 55% in Q2.
Bitcoin has now given up all of its 2021 gains and there is a real possibility — even a likelihood — that it will fall below $20,000, possibly even below the 2017 high of $19,783.21 set during the first crypto boom.
The No. 2 cryptocurrency, Ethereum, has dropped as much as 70% in Q2, 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 capitalization have dropped 40% to 70% this quarter.
The problem, as Coinbase’s Armstrong explained on the Nasdaq-listed firm’s Q1 investors call on May 11 was that while crypto price volatility is good for cryptocurrency exchanges, as people buy and sell more when prices are changing rapidly, that only works when the volatility is going in two directions.
Of course, he also said that while Q1 2022 results had tanked, down markets are “a big opportunity because … we tend to be able to acquire great talent during those periods [while] others pivot, they get distracted, they get discouraged.”
See also: Coinbase May Be Unfazed By 80% Drop, but Investors Are Clearly Shaken
Derivatives Exchanges Hit Too
It isn’t just the spot exchanges trading cryptocurrencies directly for both retail and institutional investors. The crypto derivatives exchanges are also getting hurt along with their clients.
Crypto futures investors saw more than $1 billion in liquidations on June 13, as crashing crypto prices led to the forced closure of positions as traders’ were hammered by margin calls.
More than half of those liquidations hit bitcoin traders, while another $317 million hit Ethereum investors. The Solana blockchain, an Ethereum competitor, was third with $20 million in liquidated positions, according to CoinDesk.
Beyond that, there were indications that a growing number of traders have closed their positions, which would suggest they expect further volatility — likely downward.
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