When the pandemic struck, crypto was the way out of the crisis for many. Unfortunately, the tide has turned and today, the words “crypto crisis” go together. As geopolitical instability and inflation worsen, crypto has struggled to keep from falling lower than it already has. Cryptocurrency market value has taken a hit as fear of an impending recession spooks investors.
Crypto Market Crash
In the last two years, a global crypto market worth billions of dollars took root as novice investors looked for new investment opportunities. But the crypto crisis has pretty much wiped off any gains they made. The plummeting crypto prices has also led to layoffs, hiring freezes, and in some cases, halting withdrawals to maintain liquidity. One of the biggest cutbacks has been seen in crypto advertising. While companies work to salvage what they can, they have cut down advertising spends in a big way.
Bitcoin has lost almost 70% in market value from its all-time high of approximately $69,000 in November 2021. With stocks crashing and inflation rising, the crypto crisis has turned acute, showing us that it is connected to the overall market. Analysts predict that the downturn will continue as crypto trading platforms witness slow growth. This has led to investors scrambling to find buyers but panicked investors are no longer buying. Supply has boomed, but demand has slowed leaving many with unwanted crypto on their hands. Companies are cutting costs to survive the lean period, and advertising budgets are the first to go. Most companies have put crypto advertising on hold as a measure to keep things moving. The loss in revenue has had repercussions far beyond the drawing room.
According to MediaRadar’s analysis of 200 crypto trading platforms and currencies advertising across TV, magazines, newspapers as well as online channels including websites, podcasts, and social media channels, crypto advertising is going through a sea change. Harrison Jordan, a Canada-based NFT lawyer, told Digiday that crypto advertising has taken a massive hit in recent months. He stated that as the crypto crisis worsens, brands are fearful of being associated with crypto.
Early this year in February, cryptocurrency advertisers pulled out all the stops during the Super Bowl. From bringing in mega celebrities to letting people play around with a bouncy QR code, crypto advertisers spent close to $7 million for every 30-second slot at the sports event. The ads grabbed eyeballs like no other and also worked on fostering optimism as the crypto market lost nearly $1 trillion in value in January. But the euphoria did not last long.
As per data shared by television insights and analytics firm Samba TV, Between February 2022 and May 2022, there was a 64% decline in total linear ad impressions across these crypto advertisers. “Crypto advertisers were quick to reign in ad spending as the bottom fell out of the crypto market, clearly showing a correlation between valuation and willingness to lean into advertising,” said Dallas Lawrence, SVP of Samba TV told Digilab.
Industry experts state that crypto trading platforms and startups are using this time to re-evaluate their strategies and come up with ways to survive this tumultuous period. Although crypto advertising has slowed, this period allows for advertising executives to study and revamp their media plans. This can lead to better conversations and insights on what customers need and how to meet their demands. There is no doubt that the future is digital — be it currency or the metaverse — and it is in the best interests of everyone to be prepared. Industry leaders recommend studying the current scenario to prepare for greater rewards in the not-so-distant future.