Over the past year, the management team at the high-profile financial technology (fintech) company Crypto.com has spent more than $1 billion dollars in sports marketing deals. Crypto.com has partnered with the UFC, Montreal Canadiens NHL franchise, Philadelphia 76ers NBA team, Formula 1 racing, FIFA soccer, broadcast commercials for the NFL Super Bowl with NBA star LeBron James, and another commercial featuring actor Matt Damon — not to mention its $700 million deal to secure naming rights to the former Staples Center in Los Angeles.
The Crypto.com team’s spending spree on sports has been toward a singular focus of driving brand awareness of the crypto project to recruit 1 billion users to its fintech platform that offers its own cryptocurrency exchanges and decentralized finance services. Crypto.com also provides an NFT trading portal, credit cards, and ways to earn up to 14.5% interest for storing certain cryptocurrencies on its website for liquidity and lending purposes.
However, it seems that Crypto.com may be a victim of its own ambitions and overzealous spending.
Crypto Cuts Staking Interest on CRO and Credit Card Rewards
Yesterday, Crypto.com announced in an official blog post that it’s cutting usage reward percentages for some of its credit cards as well as putting a cap on those earned rewards per month. Perhaps most significantly, the announcement stated that Crypto.com card users will no longer be able to earn extra interest for Cronos (CRO) deposits linked to the card account.
“CRO staking rewards will no longer be offered to Jade Green, Royal Indigo, Frosted Rose Gold, Icy White, and Obsidian cardholders from the Effective Date,” the statement reads, “Introducing these changes to the card program is a difficult decision. We are committed to continue exploring and forging new partnerships to unlock greater value and benefits for our cardholders.” All of these changes take effect Jun. 1, 2022.
Should You Buy Cronos Now?
According to CoinMarketCap at time of writing, CRO was down more than 13%, trading at $0.2907 per coin. The coin has been down 40% over the past 30 days and is priced at a 70% discount from its all-time high of $0.9698 back on Nov. 24, 2021. The news of the cuts to staking interest rates and credit card rewards seem to have spiked trading volume for the project more than 285% over the past 24-hour period. A lot of that volume was from the sell off earlier in the day, but the price has rebounded a bit.
Remember that this is not financial advice, and investors should only invest what they can comfortably afford to lose and do their own research. This announcement by Crypto.com is not good news, especially in light of the challenging market conditions. The overall crypto space is underperforming right now, inflation has continued to rise as will interest rates as the Federal Reserve tries to reign in consumer prices. Crypto.com seems to have overextended itself on its sports spending while cutting benefits to users – which does not instill confidence within the minds of potential crypto investors.