Hype machine: Selling the crypto future

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Cryptocurrency companies executed an all-out blitz of the airwaves during this year's Super Bowl, said Misyrlena Egkolfopoulou in Bloomberg, leaving many viewers dazed and confused. "Don't be like Larry," was one of the messages from the digital currency exchange FTX, after an amusing montage of the famous curmudgeon Larry David expressing "skepticism about everything from the moon landing to the Declaration of Independence." In other words, "Ignore the haters and start buying." Playing on "the consumer's fears of missing out," the ads seemed to work. A commercial for Coinbase featured "a bouncing QR code" that led to an offer of $15 in free Bitcoin for new users, and demand was so high that Coinbase's website crashed within minutes. But while "Americans are used to hearing a long list of risks rattled off at the end of drug commercials," there were no such disclaimers. Nobody was eager to tell viewers that the price of Bitcoin has been tumbling since November.

This felt like a rerun of the Dotcom Bowl, said Angela Watercutter in Wired. In January 2000, "some 20 percent of the advertising real estate for the Big Game" was bought by tech firms riding the wave of euphoria. Then the bubble burst. This year, commercials from crypto companies bumped up against ads from older brands, like Turbotax, trying hard to catch the reflected crypto glow. All the "celebrity-studded attempts to get new buyers into the blockchain hype wheel" felt entirely cynical, said Chaim Gartenberg in The Verge. None of the ads selling this "towering pyramid scheme" explained "what cryptocurrency technology will actually do or how it will improve things in users' lives." All they pushed was that "not getting on board would mean missing out." 

The great crypto boom has at least brought out a big cast of colorful characters in "the murky fringes of crypto culture," said Ali Watkins and Benjamin Weiser in The New York Times. Few are weirder than "the Bonnie and Clyde of Bitcoin," Ilya Lichtenstein and Heather Morgan. Their public digital trail made them "familiar characters in a realm where the flashiest personalities got rich fast." But federal prosecutors say they were "highly sophisticated criminals" engaged in a complex scheme of laundering 119,000 Bitcoins that had been stolen from a Hong Kong exchange in 2016. Authorities traced bits of the money "into accounts the couple controlled." The investigative work represents "a watershed moment in the evolving regulation of digital currency," and perhaps "a step forward in the government's ability to trace its illegal laundering."

That's good, said Ryan Cooper in The Week, because crypto exchanges are getting hacked all the time, often because they "lack elementary security features." But the entrepreneurs running the exchanges don't seem to care. They have gotten "rich beyond the dreams of avarice" by figuring out "the way to profit is by passing off the hot potato to the next sucker." Just don't let celebrity crypto endorsers like Matt Damon bully you into thinking "you're a sissy girly-man for not buying some crypto." If you'd bought in when his Crypto.com ad first aired at the end of October, "you'd have lost nearly half your money."

This article was first published in the latest issue of The Week magazine. If you want to read more like it, you can try six risk-free issues of the magazine here.