#374: The Crypto Advertising Supercycle

🌐 PLUS: Tether's distribution and adoption strategy

The Crypto Advertising Supercycle

In crypto, there is the concept of a 4-year cycle, where the boom and bust phases, and corresponding prices, are attributed to the halving of Bitcoin supply emission rates.

As crypto and Bitcoin reached mainstream acceptance, a new buzzword concept came along: the ‘supercycle’. With institutions, countries, and companies warming up to the idea that Bitcoin could be a store of value and currency, Bitcoin would break the standard 4-year cycle and grow into something else.

In parallel, crypto and web3 advertising will see its own supercycle of sorts. More specifically, we’ll see more industry-native brands advertise on traditional channels and partner with traditional brands and we’ll see industry-native products become advertising channels, eventually attracting traditional brands.

There’s nothing new about the former, but it feels like sponsorships years ago which were seen as a joke are becoming common. Remember when Staples Center (home of the Los Angeles Lakers, LA Kings, and other events) was renamed to Crypto.com Arena in 2021?

The name change was the butt of jokes and memes for weeks and it felt weird to say “Crypto.com Arena” since it was called Staples Center for 20+ years.

These naming rights, sponsorships, and ads going through web2 channels will continue to proliferate. What were a few that recently caught my eye?

Web3 advertising in web2

Ledger x San Antonio Spurs

Earlier this week the San Antonio Spurs announced that their new jersey sponsor would be Ledger, the hardware wallet company.

These deals are valued at tens of millions per year based on a variety of factors (team record, market they play in, sponsorship terms), and Ledger is showing that they’ve joined an exclusive group of companies that have the budget for these major sponsorships.

Another incentive for this deal to happen is the fact that Ledger is a French company, and the star player on the Spurs is the French phenom Victor Wembanyama 🇫🇷

Coinbase x US Army

Coinbase has moved on from the more typical sponsorships (the NBA, Golden State Warriors, LA Clippers, Borussia Dortmund, Canadian Football League and branched out to the…US Army for their 250th anniversary celebration a couple weeks ago.

A sensitive decision to make, but I’m assuming market research indicated this was a good idea.

Pudgy Penguins x NASCAR

Earlier this month Pudgy Penguins announced that they will be “partnering with NASCAR to bring Pengu to NASCAR fans worldwide”.

The details for this partnership are sparse, so it’s hard to say how much of a sponsorship this is versus a broader co-marketing opportunity across audiences. That said, if penguins were driving in NASCAR I’d be glued to my screen whenever the races happen hehe 🏁

Web3 advertising in web3

And that leads to the ‘super’ portion of the advertising supercycle:

• The crypto/web3 audience is growing even if it feels like it isn’t

• More ad inventory is coming online

• Wallets are data and targeting goldmines

Regarding the last point, Spindl (attribution, analytics, ads platform acquired by Coinbase) recently shared a case study on a wallet-connected ad campaign with Morpho (onchain lending platform) on Coinbase Wallet.

The results?

• 6x CTR vs. other channels

• One Spindl ad network publisher was a top three channel in driving onchain volume

• Another ad network publisher drove a 10% conversion rate from wallet connect to deposit (50% wallet connect, 20% onchain deposit), which is reallllyyyyy high

More sophisticated KPIs, targeting strategies, and data best practices from channels outside of web3 are starting to come in. Well, they have been for some time, but it’s fair to say that it’s becoming widely accepted now.

Web2 advertising in web3

I guess this part is the actual ‘super’ portion of the advertising supercycle.

We’ve seen a wave of crypto companies make big splashy ads and sponsorships on traditional media and channels, web3 companies get smarter with performance marketing through onchain channels, but what about traditional web2 companies targeting us?

This is of course much different than the Pudgy x NASCAR partnership, or when brands experimented with NFTs.

IMO these advertising budgets will arrive because of the valuable transaction data that wallets have leading to successful marketing campaigns, as we’ve seen with the Morpho campaign on Coinbase Wallet, run through Spindl.

We’re already seeing ads in our non-crypto digital wallets. This week Apple got some flak for pushing an ad for the F1 movie and Fandango in the Apple Wallet app.

On a personal note, this is sorta cool because I’m a F1 fan and already reserved tickets to watch the movie this weekend, and I haven’t gone to a movie theater in a over a year, so that says a lot!

Anyway, if we’re seeing these offers ads in the Apple Wallet, you’re gonna see ads in your crypto wallets. And if they aren’t straight up ads, they’ll be offers like above.

Naturally, this leads to other important topics especially relevant in the onchain world, such as privacy and user’s owning (and having the right to sell and earn from) their data. This tension will grow as more ad inventory comes online that becomes more intrusive or too on point. Fortunately, this space is world class at incentive building, and ideally this turns into a win-win-win situation (advertiser, publisher/wallet, user).

The cycle of crypto companies advertising on traditional channels has happened, is happening again, and will continue to happen. However, in the coming months and years we’ll see traditional companies and brands start advertising on our homecourt (and hopefully we get a cut if we want!).

Tether's distribution and adoption strategy

Earlier this week I listened to the Bankless podcast episode featuring Paolo Ardoino, CEO of Tether, the issuer of the USDT stablecoin. Despite USDT being the dominant stablecoin used globally, I’m not familiar with it so this episode was particularly insightful. Some episode highlights from my perspective:

• Tether made $13.7 billion in profits in 2024 and is on pace for an even bigger 2025 🤯

• They hold >$125 billion in US treasuries and are the 5th largest buyer of US treasuries

• 450 million users and gains 30 million new wallets per quarter

• Diversifying their balance sheet and investments with 100k Bitcoin, aiming to the be largest Bitcoin miner by EOY

• Have a large investment portfolio to expand their global reach

Source

These figures are massive, but the most interesting part of the episode for me was the last point. When you have half a billion wallets/users how do you keep growing? How do you retain users and dominance of your stablecoin with growing competition?

For Tether it’s a few things.

Creating use cases for consumers

Tether built 500 kiosks with solar panels and rechargeable batteries in Africa, allowing residents without electricity keep their devices powered. Subscriptions are priced at 3 USDT per month and there are already 500,000 users (which I assume means subscribers) making 10 million battery swaps.

By the end of 2026, the initiative plans to expand to 10,000 kiosks and 100,000 by 2030.

This is notable because this initiative involves:

• User acquisition: Subscribers have to pay in USDT

• Retention and engagement: Monthly subscription

Creating use cases for institutions

Tether has also been purchasing land and agricultural companies. The land and companies are investments that can appreciate in value, but the larger motivation for these investments is to show how the commodities grown and sold can become commoditized and traded via…USDT.

Sponsorships and Partnerships

And of course, the industry favorite sports sponsorships. But in the case of the Tether and its mountains of cash (almost literally lol), they own stakes in the team themselves.

The founders are Italian, so they hold a 10% stake in the popular Italian football club Juventus.

Juventus (and many other football clubs) are no strangers to crypto, and Juventus even has its own fan token, JUV. Beyond that, Juventus has a fanbase of 340 million (not sure how that’s measured) and 60 million followers across social media channels, making it a lucrative distribution and integration channel for USDT.

On top of that, Tether has invested in and is the native token for transaction fees for Plasma and Stable blockchains specialized for stablecoin usage.

Tether is an outlier in terms of companies that have a boatloads of capital to deploy, build, and experiment, but their approach for distribution, engagement, and retention is one that everyone can learn from.

See you next week!