Following the recent crypto market crash, major cryptocurrency companies have started preserving funds by reducing marketing costs.
What Happened: Coinbase (NASDAQ:COIN), Crypto.com (CRYPTO: CRO) and FTX (CRYPTO: FTT) have experienced major capital outflow following the recent market crash. According to Cryptonews, these firms subsequently scaled back expenditures on sports advertising and cut back on hiring.
Prior to the market crash, cryptocurrency companies deployed large-scale funds on sports advertising. Recall how Super Bowl LVI featured big-name stars in crypto-related commercials — Larry David for FTX and LeBron James for Crypto.com. Coinbase and eToro also spent millions on their respective ads.
Why It’s Important: Following the recent plunge in cryptocurrency prices, cryptocurrency companies have seen a major outflow of funds, with their market capitalizations severely falling. Coinbase’s share price is down 73.3% down in the past year, currently down to $59.85. Given the significant losses incurred by these firms, companies go into a capital-preservation mode. Major firms, such as Gemini, Crypto.com, and Coinbase, are now bracing for turbulent and bearish market conditions.
Meanwhile, Binance (CRYPTO: BNB) is bucking the trend. Chief Executive Officer Changpeng Zhao said in a tweet last week that there are 2,000 new hiring positions at the company.
Binance, touted as the world’s largest cryptocurrency exchange by volume traded, has also spent copiously on sports sponsorships and advertisements, sponsoring Brasileirão, Argentina Football, the African Cup of Nations, and football clubs Porto and Lazio, amongst numerous other partnerships.
