Chipotle is curating the gullible with a crypto game

by Arthur · July 25, 2022

Our fearless leader, Nilay Patel, sent me an article about Chipotle accepting cryptocurrency for payment earlier this year. I thought of writing something to troll me cryptocurrency-hating editor who loves Chipotlebut then Elon Musk did something stupid and I forgot about it.

Until now. Chipotle made the mistake of tipping us off to the new game for National Avocado Day. It’s called “Buy the Dip” because guac costs extra. The game will, according to the press release, “engage fans in a stock market simulation to ‘buy the dip’ at the lowest point and give away a total of $200,000 in crypto.” Chipotle paid $25 million to give their customers norovirus, so I guess this is how they recruit new ones.

However, “Buy the dip” is a common phrase in the crypto world, and it refers to the idea that crypto’s price movement is cyclical. Every so often, in this ideology, cryptocurrency values go through a “winter” or slump, and if you buy crypto, it will be cheap relative to the top of the next cycle. Your mileage may vary regarding this particular investment narrative.

In general, it is very difficult to time the market bottom. Encouraging people to try it, even in the form of a game, is irresponsible at best.

This isn’t Chipotle’s first crypto stunt. It would be celebrating National Burrito Day — much like National Avocado Day, this holiday is the invention of some extremely annoying marketers — by giving away $100,000 in Bitcoin (as well as $100,000 in free burritos). Chipotle then launched its own currency on Roblox called Burrito Bucks. If you played the Chipotle Burrito Builder game on Roblox, you can get a code for free food at certain Chipotle restaurants by trading in Burrito Bucks.

And then of course there’s the Flexa payments, which Nilay emailed me about. To create them, you use a Flexa-enabled app, such as SPEDN (not a typo, but a play on “hodl”, itself a drunken typo). So I downloaded the app and you know what was wild?

A screenshot of an app, where a pop-up warns the user “Do not add more ETH than you are willing to spend. The SPEDN app does not support withdrawals. To use the ETH you deposit, you must use it.” Below that is a button that says — *Haha what*

The pitch for cryptocurrency was that it would be an improvement on the existing banking system. I don’t understand how loading a wallet I can’t take out to make a transaction is an improvement over a credit card. It is significantly worse than cash. And unlike either cash or credit, every time you buy something with your Flexa account, the IRS is on the clock. Flexa will help you, minimally, with your taxes by giving you a CSV of your transactions so you can give the IRS the extra money you owe because you bought a burrito bowl with cryptocurrency.

If I were to deposit into a Flexa account, where would my crypto go? Well, according to the terms of service, “When you deposit your cryptocurrency into the app, your funds are held and insured with a licensed third-party custodian.” Great! Cool! No more questions! If you poke around a bit on the site, you’ll find that the deposits are insured by Gemini, the cryptocurrency exchange run by twins Cameron and Tyler Winklevoss.

Fortunately, Monique Soriano—an external spokeswoman for Chipotle—tells me that Buy the Dip winners will receive their crypto via a Coinbase account. Soriano declined to say how many transactions per day at Chipotle took place through Flexa, citing the company’s upcoming second-quarter earnings report. Still, I suspect that crypto is more valuable to Chipotle as a marketing ploy than it is as a revenue stream—after all, the point of Flexa is that Chipotle can choose to get paid in dollars, regardless of which crypto you use.