Crypto.com and the Dotcom bubble: What we can learn from the past - Crypto in Plain English - Episode 277 - by cryptohunt.it

Crypto.com and the Dotcom bubble: What we can learn from the past

Welcome to the Cryptohunt Jam, where we spend one minute a day to explain crypto. In plain English.

One of the more prominent companies in the crypto market, the exchange Crypto.com is seemingly in deep trouble. It has laid off thousands of people and dramatically cut back on marketing spending. Reports are now facing that raise doubts about the company’s ability to even survive.

And it’s not like other companies haven’t struggled a lot - notably, publicly traded crypto exchange Coinbase has seen big drops in revenue, since people are not trading as actively anymore.

But is Crypto.com just another big blockchain business hit by the crypto winter? Let’s take a look!

Crypto.com has a long history of attention-grabbing marketing deals. It paid a mindnumbing $700 million to put its name on the former Staples Arena, a big sporting arena in downtown Los Angeles where the Lakers play. There were Formula One sponsorships, and high-interest rates paid on deposited funds. And the biggest one of them all - you probably at least heard about it, was that now almost famous Superbowl ad with Matt Damon. A reported $6.5 million later, that ad was mocked for its script - things took off so much in fact that Southpark devoted an entire episode to make fun of it.

But big, bold bets are fine, if they work, right? Always easy to criticize them after they’ve taken their shot? Fair point, but let’s take a look a little over 20 years back when the Dotcom bubble was just about to burst.

Back then, companies were also piling millions into Superbowl ads. The most famous one was Pets.com, an online pet store, that had a sock puppet with a microphone as their mascot in the ad. The crazy thing? Worldwide internet adoption hadn’t even passed 8% of the population yet. Shortly after the ad aired, the entire Dotcom bubble burst and Pets.com collapsed as well. It was liquidated in 2001 and never reborn.

Seeing similarities? Interestingly, crypto is even earlier on the curve: It’s only at the same level of adoption as the internet was in 1998, suggesting that it’s still a baby. We may get there eventually, but it’s probably much too early to spend millions on marketing when there are just not enough users to make that money back. We are looking at you, Crypto.com, but are rooting for you - sometimes we all just get a little too excited, don’t we?

This podcast is produced by Cryptohunt.it the easiest place to learn crypto. Copywriting is done by Arndt Voges, Social Media is done by Brett Holleman, Design is done by Carmen Rincon and my name is Christian Byza, Co-Founder of Cryptohunt and I am your host of this daily show.

Disclaimer: This podcast references our opinion and is for information purposes only. It is not intended to be investment advice. Do your own research and seek a duly licensed professional for investment advice.