FTX’s Steph Curry ad is the first honest ad for celebrity cryptos
There is an advertisement for the FTX cryptocurrency trading platform that aired throughout the NBA playoffs. It features superstar Steph Curry going through a wacky version of her day – eating cereal, making pasta, carving an ice sculpture – while narrator Shaquille O’Neal insists Curry knows all there is to it. namely about crypto. An exasperated Curry repeatedly denies it. “I’m no expert and I don’t need to be,” Curry finally says into the camera, holding up the FTX app on his phone. “With FTX, I have everything I need to securely buy, sell and trade crypto.”
Give Curry and FTX points for honesty. The new ad says what should have been obvious to anyone paying attention: the countless celebrities who have jumped on the crypto (and NFT) bandwagon almost certainly know very little about what they are selling. This transcends the inherently transactional nature of corporate sponsorships. Everyone knows that athletes advertise because they get paid, not because they actually use the product. (Hulu has a series of really hilarious ads playing on that fact.) I doubt Curry, who was paid $45 million to play basketball last season, ate too many Subway sandwiches. Still, I hope he could tell the difference between the Steak and Cheese and the All-American Club he talks about in a recent commercial. It would be amazing, on the other hand, to learn that Curry – or Tom Brady, Paris Hilton, Charli D’Amelio, Snoop Dogg or Matt Damon – could explain what someone buys when investing in crypto.
Alas, the honesty of Curry’s publicity is offset by its cynicism, which sets a new standard for an industry with so much to spare. The crypto advertising blitz started in earnest late last year, rising with the price of digital assets. The Super Bowl infamously featured several big-budget industry ads. Most notable was an FTX ad featuring comedian Larry David dismissing crypto as a passing fad, with the kicker, “Don’t be like Larry.” As several observers have pointed out, these ads conspicuously omitted anything about the substantive merits of crypto. Rather, they tried to instill a sense of FOMO, or the fear of missing out, by suggesting that viewers who don’t buy now will, like Larry, regret it.
These FOMO ads at least left open the possibility of a consumer educating themselves about crypto before investing in it. The Curry ad dispenses with this claim. To be fair, there’s a difference between not being an expert on something and being clueless about it. But the announcement is clearly aimed at people who have been hesitant to trade cryptos because they don’t understand them. The message for them: don’t worry, Steph either! And perhaps, by extension, no one either! If everyone is operating in ignorance, maybe you’re not at a huge disadvantage. So go ahead, trade. FTX did not respond to requests for comment.
Warren Buffett, the legendary investor, reportedly advised, “Never invest in a business you can’t understand.” (It’s not clear that he ever used those exact words, but the saying took on a life of its own.) A traditional investment is a bet that the company you’re investing in will grow in value over time. As the fundamentals improve and the business grows and becomes more profitable, more people will be willing to pay more for a part of it, which will increase the value of your shares. If you can’t understand how the company makes money, you have no basis to make a reasoned judgment about its stock performance. Yet, as the Curry ad makes clear, the crypto market has a way to eliminate this intermediate step. Forget the fundamentals: for average investors, deciding to buy a certain cryptocurrency seems like a pure bet that someone else will want to buy it for more money in the future. This is also the philosophy of the meme stock phenomenon, which is philosophically closer to the world of crypto than to traditional stock market investing.
There is a name for investments whose value depends solely on finding future buyers willing to pay more than you invest: Ponzi schemes. Critics have tagged crypto with this tag for almost as long as crypto has existed. Recently, the review gained support from an unlikely source. Sam Bankman-Fried, the founder and CEO of FTX, appeared last week on the odd lots Podcast. During the discussion, Bloomberg financial columnist Matt Levine asked Bankman-Fried to explain “yield farming,” a form of crypto investing where people can buy into “pools of cash.” who can pay very high interest rates but can also go south fast.