Arguably one of the most aggressive marketing campaigns in crypto is running out of steam. Crypto.com is shedding employees and cutting back on sponsorships as the crypto winter sets in.
Successes during crypto bull market
At the height of the crypto bull market in November of last year Crypto.com had amassed around 50 million users of its platform, and its marketing team had forged deals throughout the sporting world – deals which included the NHL, the Italian Serie A, Formula 1 motor racing, UFC, Paris St Germain, among many others. The whole marketing spree then culminated with Cryto.com agreeing a sponsorship for the FIFA World Cup 2022 in Qatar.
AdAge published an article yesterday by Asa Hiken on Crypto.com’s “marketing meltdown”. The article states that Crypto.com had just completed its obligations as primary sponsor for F1s Miami Grand Prix when the crypto market started its descent into the current bear market.
The article goes on to say that over the following months Crypto.com “downsized many of the partnership deals” that had been made in sunnier times. It even went as far as trying to pull out entirely from some of the deals given its rapidly reducing income as crypto tanked lower.
Next reduction to happen was in the workforce, as 30% to 40% of those who were contracted earlier this year were laid off over the summer months.
However, Crypto.com has kept the exact figures of the amount of employees laid off close to its chest. Where multiple sources have estimated the number of employees let go at around 2000, Crypto.com has officially admitted to laying off just over 1000.
“multiple sources independently stated that just over 2,000 employees have left the company since layoffs began. Crypto.com was previously reported to have let go of just over 1,000 employees at most. Marketing personnel were some of the first to be targeted by the layoffs, including an entire in-house creative team that was eliminated mere months after its creation, sources said.”
Crypto.com has brought to an end deals with Angel City FC, Twitch Rivals, and the UEFA Champions League. Other deals are still ongoing, but the crypto platform has cut back on several of its obligations there.
It may well be argued that Crypto.com’s short term success was very much due to its incredibly ambitious marketing strategy. However, this strategy relied on attracting many more investors to its platform at the same time as adding ever more high level sponsorship deals.
The number and prestige of the deals were obviously the magnet that was expected to draw in more customers. However, even in very bullish circumstances such a strategy is not without risks. In a bear market the risks are multiplied.
If Crypto.com can draw in its horns and properly manage further cut-backs if needed, then survival could be attained. Given that the crypto lender was all about a high growth strategy, a possible change of course could be extremely tricky to navigate.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.