Why cringey crypto advertising Matt Damon doesn’t make you laugh

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Taking social media reflections seriously has been one of the costly lessons of the past year for sophisticated investors.

From GameStop’s epic short squeeze to the rise of cryptocurrencies, non-fungible tokens and ETFs, retail bettors have been investing money in trending market tips while sharing their highs and lows on Twitter. , TikTok and Reddit. U.S. investors invested more than $ 1 trillion ($ 1.4 trillion) in stocks last year, more than the past two decades combined.

Hedge funds and investment banks have decided not to get caught up in the crowds and have developed new tools to glean signals from the mind of the social media hive. Well-paid analysts now send out natural language processing-based alerts that read like trading haikus: “crypto, china, stake, btc, eth, dip, hold, ada, long, moon.” “

The next test for social media scrapers will be how seriously to take mockery. This week, the online peanut gallery opposed actor Matt Damon’s ad for the crypto.com trading app, shown during screenings of the new Spider Man movie and at football matches (presumably a sign of the target population).

In the announcement, Damon pays homage to the explorers, innovators and astronauts of history, before urging ordinary people to follow his lead in the volatile world of crypto trading. “Cringe” and “yuck” were among the rave reviews, as viewers wondered how Dogecoin – described as “faking money for a computer dog” – could be compared to climbing Mount Everest.

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The sniper reaction to decent crypto advertising could be an interesting signal to sentiment bots for two reasons. The first is that celebrity crypto endorsements, from adopting laser avatars to promoting apps, could lose their power as drivers of retail investor enthusiasm. Judging by reviews of Damon’s Wealth, influencers seem vulnerable to the same kind of populist backlash they tried to co-opt. Their scope is also closely watched by governments.

The second reason is that the crypto world’s advertising blitz, from stadium sponsorships to billboards, hasn’t generated any market gains either. The price of Bitcoin in December suffered its worst monthly drop since a 35% rout in May, and shares of Coinbase Global fell 30% in two months due to worse-than-expected quarterly results. The Robinhood Markets Inc trading app, the symbol of stock madness, recently hit its low.

An ETF explicitly designed to capture stocks of memes, PSPCs and “everything that happened at the time,” dubbed the FOMO ETF, has fallen 12.6% in six months. Idealistic bets on the moon are struggling in a post-Covid inflationary world, as attested by famed active manager Cathie Wood’s ARK fund.

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