Will Crypto.com’s Clever Branding Strategy Pay Off?-Cryptocurrency.Mohoagd

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The stadium stunt by Crypto.com might potentially be a good investment.


Among other things, Crypto.com has spent a lot of money sponsoring professional sports teams, the UFC, and Formula 1 racing. Matt Damon, the actor, was also appointed as a brand ambassador. Most recently, it took a major step by paying $700 million buying the branding rights to the Los Angeles stadium formerly known as the Staples Center.


The price of CRO tokens increased from 10 cents in the summer to 90 cents in November as a result of all of this promotion. Since then, the price has dropped to around 50 cents. Despite the sell-off in the broader cryptocurrency markets, it's been an excellent run. Will CRO, however, live up to the hype?


The Infamous Stadium Curse


The other side of this astute marketing is that it has a poor track record in the past, at least when it comes to stadiums. When a company makes a huge splashy acquisition yet only has a restricted budget, it usually means management is getting ahead of itself.


In respect to SoFi, I recently detailed the stadium curse (NYSE:SOFI). SoFi is another company with an uncertain business strategy that is squandering money on stadium naming rights without having the financial flow to back up such high-priced marketing deals.


Consider some of the other firms that have paid for stadium naming rights. The American Airlines Center, Enron Field, Invesco Field, Adelphia Coliseum, Chesapeake Energy Arena, and the Adelphia Coliseum were among the venues. All of the companies saw precipitous declines, with some committing outright fraud.


Is a company like SoFi or Crypto.com destined to follow in the footsteps of Enron or Adelphia? Of


Why Crypto.com Might Break The Curse


In terms of the stadium curse, I'm actually less gloomy for Crypto.com than I am for SoFi. What's up with that? SoFi, for example, is seeking to destabilize the established banking system. SoFi is trying to earn money selling items like student loans, which is a low-margin company. To put it mildly, the timing for receiving payment on a large stadium agreement is unknown.


The basic business of Crypto.com is based on excitement rather than genuine fundamentals. So much of cryptocurrencies is benefiting from a first mover advantage right now. Despite having no real-world utility, a coin with a well-known name can achieve a high valuation. If you don't believe me, just look at the procession of dog-related meme tokens.


There are a slew of new bitcoin exchanges popping up all over the place. So, what can you do to make yourself stand out? Purchasing a naming rights contract for a stadium surely meets the bill.


Crypto.com Paid A Fair Price For Massive Publicity


There were hundreds of dot-com enterprises that went bankrupt and no one remembers them anymore. Many people recall that funny Pets.com sock puppet if you mention Pets.com. What's up with that? Because Pets.com made the irrational decision to buy a Super Bowl ad despite the fact that company had no significant revenues or even a solid business concept. Even if the underlying business has no potential, a publicity stunt can work.


So much of the battle with crypto is just being noticed. Because traders are accustomed to crypto tokens having no practical utility, the major metric of success is hype. In comparison, a company like SoFi must convert its advertising expenditure into more genuine student loan consumers.


Crypto.com's stadium play was a huge success when it came to attracting popular attention. It purchased a large quantity of publicity up front for $700 million. Yes, the majority


Crypto.com Coin Verdict


Cryptocurrency trading is a difficult business to forecast financially. When trading demand dries up, as we've seen with Robinhood (NASDAQ:HOOD) this year, revenues might fall off a cliff. This is not a business that is as stable as, say, a stock exchange. Cryptocurrency is a developing market, and investors should size their investments properly.


Furthermore, before the stadium naming rights gamble, Crypto.com was hardly a household name. With a company like Coinbase (NASDAQ:COIN), you already have a well-known brand, a large user base, and a strong network of partners and backers. To achieve a similar level of commercial sustainability, Crypto.com has a long way to go.


But, for the time being, I'd have to call their stadium naming rights deal a success. During a period when cryptocurrencies as a whole has been struggling, the price of its token, for example, has soared by hundreds of percent. And in the Bitcoin world, simply possessing a wallet isn't enough.

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