Coinbase Crashes After ‘Crypto Bowl’ Ad, Stock Dips Then Rebounds

Mandatory Credit: Photo by Avishek Das/SOPA Images/Shutterstock (11863354e)In this Photo illustration of a Coinbase logo seen displayed on a Smartphone.
Avishek Das/SOPA Images/Shutterstock / Avishek Das/SOPA Images/Shutterstock

Coinbase was apparently a victim of its own success thanks to its Super Bowl ad, one featuring a floating QR code, which generated “more traffic than we’ve ever encountered.” However, said traffic sent both the app / site and the stock crashing. Due to the proliferation of crypto ads present during this year’s premiere football event, the Super Bowl was cheekily dubbed the “Crypto Bowl” by some observers.

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Coinbase stock fell 1.7% to $191.26 at 6:23 a.m. in premarket trading on Valentine’s Day, and it’s possible that shares were reacting to the company’s inability to handle that much traffic, Barron’s reported. The stock was back up 1.62% mid-morning on Feb. 14.

“Coinbase just saw more traffic than we’ve ever encountered, but our teams pulled together and only had to throttle traffic for a few minutes. We are now back and ready for you at http://drops.coinbase.com. Humbled to have been witness to this. #WAGMI,” Coinbase chief product officer Surojit Chatterjee tweeted shortly after the ad aired. This was followed by a company tweet, saying “We’re back up and ready for you!”

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“The ad just aired! Shortest link between your TV and phone is a QR. Thank you to the team who worked hard on the idea and came up the site to deal with the surge of traffic. And welcome all the new folks to the cryptoeconomy! https://drops.coinbase.com in case you missed it,” Coinbase CEO Brian Armstrong tweeted.

In addition, data tracked by The Block Research shows that Coinbase’s app surged from 186th place to second on the App Store following the ad.

However, critics quickly flooded Twitter, bringing attention to potential security issues and poor planning on the part of Coinbase.  

“Coinbase spending $16,000,000 on a Superbowl ad to direct people to their website and $0 to make sure that website doesn’t crash 10 seconds after the ad starts is so very internet,” Edward Snowden tweeted.

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Crypto Experts Weigh In On Ads

Industry experts seem to also be divided over the “crypto bowl” hype. Anto Paroian, chief operating officer at digital assets investment fund ARK36, told GOBankingRates that on one hand, it is fascinating to see how far the crypto space has come in terms of widespread adoption and recognition.

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“By all accounts, a Super Bowl commercial is the definition of going mainstream and for that reason, last weekend will no doubt be remembered as a significant moment for the industry,” he said. “On the other hand, the crypto bowl bore an eerie resemblance to the dot-com bowl back in the year 2000 that signaled the peak mania moment of the dot-com stock bubble. Of course, the conditions on the digital asset market now are much different and there is nothing that could suggest major digital assets like Bitcoin are overpriced. Still, crypto assets are inherently volatile and there are many projects in the crypto space that won’t stand the test of time.”

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He added that, unfortunately, retail investors who will plunge headlong into crypto after seeing a Super Bowl commercial may have no means to perform proper due diligence and so run the risk of investing in a project with no sound basis for sustained growth.

“For the majority of investors, investing through an intermediary would be a more effective and safer way to obtain exposure to this asset class,” he added.

Other experts applauded the phenomenon, including Ruud Feltkamp, CEO of cloud-based automated crypto trading bot Cryptohopper, who told GOBankingRates that: “It’s great to see crypto showcased to the general public like this. It also shows so much more potential in crypto since many people are not using it yet. We are still among the early adopters.”

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About the Author

Yaël Bizouati-Kennedy is a full-time financial journalist and has written for several publications, including Dow Jones, The Financial Times Group, Bloomberg and Business Insider. She also worked as a vice president/senior content writer for major NYC-based financial companies, including New York Life and MSCI. Yaël is now freelancing and most recently, she co-authored  the book “Blockchain for Medical Research: Accelerating Trust in Healthcare,” with Dr. Sean Manion. (CRC Press, April 2020) She holds two master’s degrees, including one in Journalism from New York University and one in Russian Studies from Université Toulouse-Jean Jaurès, France.

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