The Breakdown - What FTX Marketing Was Actually Trying to Accomplish

Starting point is 00:00:04 Welcome back to The Breakdown with me, NLW. It's a daily podcast on macro, Bitcoin, and the big picture power shifts remaking our world. What's going on, guys? It is Sunday, August 10th, and that means it's time for Longreed Sunday. Before we get into that, however, if you are enjoying the breakdown, please go subscribe to it, give it a rating, give it a review, or if you want to dive deeper into the conversation, come join us on the Breakers Discord. You can find a link in the show notes or go to bit.ly slash breakdown pod. All right, friends, back with another Long Read Sunday, and we got an interesting one today. It's one that, as you'll see, I have a little bit more of a direct connection to, let's say, an opinion informed by that.

Starting point is 00:00:48 The piece, which has a photo of the old FTX Arena, so you can see where this is headed, is called Crypto Has a Coms issue. It's by Aubrey Strabel and Elena Nisinoff, who have just launched a new CryptoFocus PR firm called Halcyon. I'm going to turn it over to the Eleven Labs version of myself to read this. this, and then I will come back. Earlier this month, NPR ran a headline, why there's so much excitement around a cryptocurrency called Stablecoin. If you want to understand where crypto stands with legacy media in 2025, start there.

Starting point is 00:01:19 The piece was a basic primer on a decade-old innovation that settles nearly $27 trillion annually, surpassing the combined annual transaction volume of Visa and MasterCard. Stablecoins are not new, and neither is the media's in curiosity about them. It was the most recent proof point that in the eyes of legacy media, crypto remains suspended in a state of perpetual novelty. The gap between crypto's market performance and the stories told about it reveals a deeper communications failure. It keeps the public in the dark about transformative advances in a $4 trillion industry.

Starting point is 00:01:52 Today, Bitcoin is up over 110% year-to-date. US-listed Bitcoin ETFs have attracted over $50 billion in net inflows, marking one of the most successful ETF launches in history. Global crypto adoption has surpassed 600 million users, with countries like Turkey, Argentina, and the UAE reporting that nearly one in three adults own crypto. Consumer products are also taking off. Decentralized prediction market, polymarket has seen over $100 million in volume on the 2024 U.S. election alone and is reportedly on track for a $1 billion valuation.

Starting point is 00:02:27 Beneath the surface, on-chain rails are quietly powering a new global financial infrastructure. However, mainstream media narratives have failed to keep up. According to a report by perception, while Bitcoin posted record performance in quarter 2, 2024, the Wall Street Journal published just two articles on Bitcoin and Crypto, the Financial Times and the New York Times, respectively managed only 11, compared to 141 by CNBC and 65 by Barron's. This lack of coverage in top financial outlets means that one of the most important financial and technological innovations of our time is not reaching investors,

Starting point is 00:03:02 policymakers, and the public. The gap between market signals and coverage in crypto is an existential liability and has dire political, regulatory, and cultural consequences. For many Americans, crypto is still a spectacle, seen as volatile, unsurious, and untrustworthy. Legislation is based as much on perception

Starting point is 00:03:21 as it is on principle. Markets respond to narratives as much as numbers, and voters form opinions through headlines. This isn't just a branding problem, but a structural issue rooted in how Bitcoin and crypto has let the world tell its story, and often get it wrong. The industry did not just lose public trust during the last cycle. It lost the plot. In pursuing mass appeal, the industry opted for spectacle over substance, with stadium naming rights, Super Bowl ads, and celebrity campaigns. It borrowed legitimacy rather than cultivating its own. When FTX, BlockFi, and Celsius imploded, the public

Starting point is 00:03:58 had no coherent story to fall back on. Today, Bitcoin's success is grounded in real market signals, not projections, ideals, or hypotheticals. The data shows that crypto is flourishing. Like any serious asset class, its credibility is proven by the numbers. The role of crypto communications now is not to spin a story, but to use and interpret the one that the market is already telling. The obstacles to clearer coverage are persistent. Stories highlighting presidential meme coins cast the technology as a political toy. Bitcoin and crypto's involvement in the 2024 election further embedded it in partisan culture wars and cast it as a partisan talking point with mainstream media. Like the internet, Bitcoin has no ideology or politics. Its origins proposed a system built not on

Starting point is 00:04:43 trust, but on math, code, and consensus. It emerged post-financial crisis, when confidence in central institutions was shaken but intact. Gradually, the 2016 election, the pandemic and heightened focus on inequality deepened public skepticism. Into that erosion, Bitcoin proposed an alternative, a system built not on trust, but on the values of the internet and modern ideals of self-determination, global access, and direct ownership. Crypto is established and legitimate enough to tell its own story. It doesn't need a rebrand or more flash. It needs facts grounded in what the market has already shown to be true. This will not be the work of a single campaign or stakeholder. It requires the long and dedicated work of narrative stewardship by builders, users,

Starting point is 00:05:29 and communicators that can own and execute on telling our own stories. If we don't, others will, and they will keep getting it wrong. All right, back to Real NLW here. First of all, let's talk about where I fiercely agree. I think that Aubrey and Elena are very much correct to say that this category now has the ability to simply tell the story of its own adoption. To explain in clear terms what it's used for, why, and to show that lots and lots and lots and lots of people agree. I also think that they're correct, that the industry has an incentive to tell those real stories, to create the breadcrumbs that outside media can find. I also have known Aubrey for a long time in this space, and I'm very excited that they're building Halcyon. I think it's likely to be a

Starting point is 00:06:17 very valuable asset for the whole industry, and I'm glad that they're doing it. Now, what I obviously want to talk about, is this part. The idea that last cycle we lost the plot, that we opted for spectacle over substance, that stadium naming rights, Super Bowl ads, and celebrity campaigns were an incorrect move. The TLDR of this is I think that this is hindsight bias and outcome bias. As the chief architect of this strategy at FTX, let's talk about what we were actually trying to accomplish, and more specifically what I personally was trying to accomplish. Today's episode of The Breakdown is brought to you exclusively by Grayscale. Grayscale is almost certainly a name you know.

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Starting point is 00:07:33 Go to grayscale.com to explore their full suite of crypto investment products and invest in your share of the future. First of all, let's talk about what FTX had to do. The mandate of the moment for FtX at that time was to catch up on the brand recognition that Coinbase had a 10-year head start on for, and to do so as quickly as humanly possible. That was the goal, right? FTCS was moving out of the realm of just professional traders into the realm of regular consumers, and the biggest competitor and best-known competitor had a 10-year head start on brand. In that context, there is simply no way to organically do it. Aubrey and Elena are right to say that this was borrowing legitimacy rather than cultivating it, because that's what brands do. They have to do it.

Starting point is 00:08:22 because there's no way in fast order, because cultivating it takes time. They're also not as mutually as exclusive as that statement seems, but my point is that borrowing legitimacy is just what you have to do when you're moving at the speed that we were trying to move at. So that was the mandate that I had coming into this. Based on the goals of the organization, I and the other folks who were working on this had to take swings that were just outsized, enormous, and gigantic. Now, in terms of the specific decisions, the logic there, also followed the biggest swing possible, fastest move possible logic. The reason that stadium naming rights are so interesting is the amount of earned brand placement that you get from them.

Starting point is 00:09:03 They seem expensive at first, but if you look at every single news report around any game, it always talks about the name of the stadium. It is actually from a pure impressions basis, one of the more interesting things you can do if, of course, you can afford it. Super Bowl ads as well. Super Bowl ads are the singular time per year that people actively want to be advertised to. It's the literal only time. There are people who watch the game just for the ads. That is an incredibly different place to tell a brand story than any other context you get. And so while yes, they are in raw terms incredibly expensive, they offer something that no other type of advertising does. Especially if you can do a really good one that everyone talks about. You get an incredible amount of earned media.

Starting point is 00:09:50 from that as well. Lastly, celebrity campaigns. Celebrity campaigns absolutely have the most variability when it comes to how impactful they can be. There was a reason that FTX went for the very, very top of the heap with Tom Brady. There was never really a consideration of whether we'd work with someone else from the NFL. It was Tom Brady or bust, because at that time especially, but frankly even now, there was just simply no question of who the best player in the league was. Brady was the undisputed, goat. It was like, working with Michael Jordan in 1996, when it comes to borrowing legitimacy, that's the legitimacy you want to borrow. Now, obviously, this is the area that can most quickly go off the rails. There were a lot of the FTX celebrity campaigns that I wasn't the

Starting point is 00:10:36 main decider in and probably wouldn't have done. And so I think that there's certainly validity to the idea that that's a strategy that can go off the rails. But the other piece of this that's important to note, and one of the reasons why it was so frustrating, what Sam had done and how it all played out, was that because the mandate was simply to get FTX as known as possible, it wasn't to talk about why our trading platform was better than someone else's trading platform, it was simply brand recognition. I had the opportunity and the space to tell the exact story about the industry that I wanted to. If you go back and look at all of the ads that we did, all of these celebrity ads, they could not have been more different

Starting point is 00:11:19 than the type of stuff that was coming out of, for example, crypto.com. The story that we were telling was crypto as invitation, a new world, a new opportunity, and everyone was invited. You probably don't remember, but the first Tom Brady ad was him and Giselle calling all of their friends, all of their colleagues, all of their peers, all the people who worked in their house, their plumber, their hairstylists, they're everyone, and inviting them into the crypto space. It was a specific rejection, in other words, of the idea of crypto as exclusionary. It was a rejection of the idea that you had to want the system to fail to want crypto to work. The point being, that if you actually go back and look at the substance of the

Starting point is 00:11:59 entirety of what I was trying to do at FTX with that storytelling, it's actually exactly what Aubrey and Elena are arguing for here. The industry to stand up and tell the story that it wants about itself, not just letting mainstream media shape the narrative that it likes. The problem, as with everything with FTX, is that the fact that the CEO of the company was stealing from everyone destroyed all of that in rot. The damnable thing about it, too, and the thing that's not mentioned here, is that ultimately Elena and Aubrey are asking for something that's not necessarily in the incentive of most companies to do. They're saying the crypto industry needs to tell a story about itself, but whose job is that? Every company wants to tell a story

Starting point is 00:12:42 about itself, not the industry as a whole. You don't win by telling the story about the industry as a whole. You win, at least in most cases, by talking about yourself. There are a very small handful of actors, companies like Coinbase and Circle, that are actually of the size and scale where it makes sense for them to tell the story not just of themselves, but of the industry as a whole. And I hope they take that opportunity. Anyways, all of this is obviously not to disagree with this piece, but just to provide a little more color, if only for the sake of historical posterity. I hope this was a little interesting nugget for you. For now, that's going to do it for today's breakdown. Appreciate you listening as always, and until next time, be safe and take care of each other. Peace.

The Breakdown - What FTX Marketing Was Actually Trying to Accomplish

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