Not only are layoffs happening frequently! Most cryptocurrency companies have reduced advertising spending by more than 50%

Over the past year, as the market continued to grow, many cryptocurrency companies have been spending millions of dollars on advertising, such as Super Bowl ads, stadium sponsorships, and endorsements from celebrities and athletes. However, with the overall market capital tightening and companies resorting to mass layoffs to survive the bear market, these companies that once splurged on advertising have significantly reduced their marketing expenses.

Cryptocurrency Companies Slash Marketing Spending

According to a report by The Wall Street Journal, since Bitcoin hit a high of $68,991 in November last year, major cryptocurrency brands have been gradually reducing their advertising spending on digital platforms like YouTube and Facebook, with a decrease of about 90% compared to the peak. Additionally, with the market conditions not favorable and the absence of major events such as the Super Bowl or Winter Olympics, TV advertising spending has also significantly decreased.

"Overall, the macroeconomic confidence level is quite low at the moment. When the price of Bitcoin is low, the engagement of applications and new customers tends to be lower," said Dennis Yeh, an analyst at market research company Sensor Tower.

According to the report, here are the changes in digital and TV advertising spending for various cryptocurrency companies during this period:

1. Crypto.com's spending decreased from $15 million in November 2021 and $40 million in January to $2.1 million in May, a decrease of about 95%.
2. Gemini's spending decreased from $3.8 million in November to $478,000 in May, a decrease of about 87%.
3. Coinbase's spending decreased from $31 million in February to $2.7 million in May, a decrease of about 91%.
4. eToro's spending remained around $1 million.

However, not all companies have reduced their advertising spending. FTX spent around $3 million on advertising in November last year, which grew by about 73% to $5.2 million in May this year, and announced on June 1st the hiring of NBA Lakers superstar Shaquille O’Neal as a brand ambassador.

Industry Entering a Cold Spell

In addition to being hit by the economic downturn, regulatory agencies are paying more attention to the cryptocurrency market due to recent industry scandals. The U.S. Securities and Exchange Commission warned investors in June this year to be cautious of companies that heavily rely on celebrity endorsements.

Taylor Grimes, business development director at the U.S. advertising agency Martin Agency, also stated that he received proposals from over ten cryptocurrency brands in 2021 and early 2022, but these demands have dwindled recently.

"Until a few months ago, it was still an important new area and a very creative field. However, these requests have basically dried up in recent weeks," said Taylor Grimes.

Nevertheless, the economy has its own cyclical nature, and during bear markets when spending is cut, companies have more time to focus on building and developing. Michael Sonnenshein, CEO of digital asset management company Grayscale, stated that it's time for the industry to shift towards educating consumers about the benefits and risks of emerging asset classes.