February 11, 2022
Illustration: Christopher T. Fong/Protocol
Good morning, and welcome to Protocol Fintech. This Friday: the Crypto Bowl, Affirm’s rough earnings, and Binance’s Forbes deal.
Really, I feel sorry for whoever hit “send” on the tweet that ruined Affirm’s day. Earnings are supposed to be a carefully orchestrated reveal, with management cajoling anxious analysts on a call into the best possible interpretation of the numbers. The “buy now, pay later” company’s inadvertent leak meant it would be hours before the company could tell its story. It doesn’t help that the markets are particularly jumpy right now. It’s almost like traders need some … Affirm-ation?
— Owen Thomas (email | twitter)
If you’re already feeling inundated with crypto ads, don’t watch the Super Bowl on Sunday.
FTX, Coinbase, Crypto.com and others have booked commercial time during the most-watched media event of the year. The Los Angeles Rams and Cincinnati Bengals are playing at SoFi Stadium — another player in crypto buying — and the point-of-sale systems at the venue are run by Square, whose parent company renamed itself Block to emphasize its push into bitcoin.
You won’t get any relief after the Super Bowl ends. Crypto’s advertising push is just getting started.
The Super Bowl takeover is drawing comparisons to 2000’s “Dot-Com Bowl,” when a fifth of the ad space went to internet startups. A lot of those companies went bust, Jef Loeb, brand strategist for marketing firm Brainchild Creative, points out.
Why did Willie Sutton rob banks? Because that’s where the money is. That’s pretty much the same rationale for the crypto ad boom.
It’s not just TV spots. Crypto companies are looking to make a lasting impression with longer-term deals to promote awareness.
Regulators and Big Tech could crash the party. Facebook and Google have only recently loosened restrictions on crypto advertising, and it’s still hard for some companies to advertise online. Spain, Singapore and the U.K. are placing restrictions on crypto ads, in part to bring them in line with other financial promotions. But barring the most extreme bans on advertising, billions of dollars are still pouring into the crypto sector. And some of that money will find a home wherever you can place a pitch.
Between 2020 and 2021, the proportion of U.S. consumers using fintech grew from 58% to 88%. This is fintech’s mass adoption moment. Download Plaid’s report to get the latest insights and expert analysis on fintech’s groundbreaking year.
On Protocol: Binance took a $200 million stake in Forbes. The world’s biggest crypto marketplace is expanding its reach into traditional media, with Forbes stating that it was a “strategic investment.”
The BBC pulled a documentary, “The Crypto-Millionaire,” from the air after concerns were raised about its crypto claims. Featuring a crypto entrepreneur named Hanad Hassan, the documentary claimed that Hassan had turned a $50 investment into $8 million within a year. Critics raised doubts about its accuracy.
Klarna could reach a $60 billion valuation. The “buy now, pay later” company is considering a new funding round, with sovereign wealth and pension funds as investors. The company was most recently valued at $45.5 billion.
Kenya’s central bank is thinking of issuing a digital currency. After researching the risks of a potential CBDC, the bank is looking toward public opinion before making a decision, a move that is required of all public bodies in Kenya.
NFTs actually only make up 1% of the crypto market. Even though NFTs seem to be everywhere these days, they only make up $16 billion of the $2 trillion digital asset market. Unsurprisingly, profile-picture NFTs make up about 46% of all NFTs.
It’s been a harrowing ride for Affirm, which was worth around $45 billion in November and ended Thursday worth less than $16.5 billion.
That was after Affirm accidentally tweeted out some of its second-quarter numbers in the middle of the day, leading to an early release of its financials, a trading halt and more gyrations.
It was easy to miss the good news in the chaos: The “buy now, pay later” company, which has clinched deals with Amazon, Shopify and Walmart, reported a 115% year-over-year increase in volume to $2.4 billion. Amazon helped, but the company said its volume would have doubled even without Amazon.
When Affirm filed to go public in 2020, Peloton was its top merchant, accounting for 30% of its revenue. Peloton’s now No. 2 and under 10% of Affirm’s sales, a credit to its push to diversify.
Among the leaked numbers, traders seemed most concerned about the outlook. Affirm suggested it wasn’t. “We’re very happy with the pace at which we’re scaling, and we’re certainly not focused on or concerned with the next quarter,” CFO Michael Linford said. “We’re really looking about where this network will be over the next decade.”
— Lindsey Choo
With no single use case surpassing 70% adoption, fintech still has enormous room to grow. In this report you’ll learn how fintech grew across genders, generations and ethnicities and how Americans plan to use fintech beyond just saving time and money.
A surprising amount of payments still move by check, particularly in the business world. Bill.com is growing fast by chipping away at the analog remnants of this system. It processed $56.4 billion in the most recent quarter, 11% more than analysts had expected, and its stock soared. Renaissance Capital cited it as one of the best-performing companies in its index of recent IPOs.
Thanks for reading — see you after the Crypto Bowl!