Shares of the largest publicly listed US crypto exchange Coinbase slipped in premarket trading on Monday. After a surge in traffic following a Super Bowl advertisement resulted in the app crashing briefly over the weekend.
A floating, colorful QR code was displayed during NFL’s title game, the biggest US TV event of the year. It redirected people to a link that offered $15 in bitcoin to those who sign up for a Coinbase account before Feb. 15.
The site saw 20 million hits on its landing page in one minute after the launch of the bizarre advert.
Coinbase reported “more traffic than we’ve ever encountered,” which meant it needed to “throttle traffic for a few minutes,” Chief Product Officer Surojit Chatterjee said in a tweet. “We’re back up and ready for you,” Coinbase tweeted separately.
We’re back up and ready for you! https://t.co/YPIEt0ryVb
— Coinbase (@coinbase) February 14, 2022
Coinbase ran ads alongside FTX, Bitbuy, and eToro at the US football championship. As crypto companies bet sports advertising will help them go mainstream.
Investors appeared appropriately concerned about the company’s IT infrastructure. Most websites and platforms aren’t built to accommodate tens of millions of visitors at a given time. The error messages the would-be users saw during the game suggest that many of them may not have been able to complete their registration. Investors will have to wait until Coinbase’s next earnings report to see the ultimate impact this ad had on its user numbers and how those new additions impacted its near-term transaction volumes.
On the other hand, such an immense surge in traffic to one’s platform following a Super Bowl ad ought to be viewed positively. It’s hard to accurately measure the success of most TV advertisements. But the clear results from this one have some investors reasonably excited about the platform’s ability to grow its user base of retail investors.
The question is whether the company will be able to turn a significant share of these new signups into active monthly users who boost its transaction volumes in a sustainable way. But as on Monday, at least, the market is viewing Coinbase’s Super Bowl ad as a win.
Although the Coinbase outage lasted only a few minutes, it sent the company’s stock plunging by as much as 5 percent prior to the opening of trading on February 14. However, Coinbase’s stock opened at $193.49 (roughly Rs. 14,600), only marginally below the previous close of $194.53 (roughly Rs. 14,700), and was up by as much as 3.8 percent in morning trading. Eventually settling back to a gain of roughly 1.7 percent by mid-morning.
