This is an excerpt. To hear the full interview, please click the Soundcloud or Youtube links.
The massive market slides that have taken place over the past year in the cryptocurrency industry could be evidence of several things. Some analysts believe that the shift is because of decreased speculative interest in the cryptocurrency economy; others place the blame on increased regulatory scrutiny.
Still others see the changes in the crypto economy as evidence of a maturation of the markets–a maturation that does indeed involve a lack of speculative interest and increased regulatory scrutiny, but also that will bring longer-term stability.
Finance Magnates spoke with Nicc Lewis, founder and CEO of Israel-based marketing firm Expozive. Nicc shared his insights about the practical ways that regulatory attitudes are affecting crypto industry practices, including advertising in the crypto industry.
”People Think that an ICO is a License to Print Money
When it comes to bad practices within the ICO space, Nicc said that he believes “that people think that an ICO is a license to print money.”
“You need to have a good offering, a clear offering, an offering that has value. You need to have an offering that has some legitimacy, some backing, something that goes behind it. It’s quite simple,” he said. “If I wanted to launch a ‘NiccCoin’ tomorrow based on the fact that I’m just a good guy, it wouldn’t go as far as Uber saying that they’re going to make a base currency for the Uber network throughout the world. As an investor, I’d rather invest in Uber than in Nicc.”
“This leads to more than half of ICOs failing,” he continued. “Each failure pushes more pressure on the regulators to do something about the failures.”
— Nicc Lewis (@Expozive) September 1, 2018
Nicc also said that many people within the ICO space lack the understanding of the kind of budget that’s needed to hold an ICO. “Most people see ICOs as either a quick way of making money, or much simpler than an IPO, in case of a corporation trying to raise funds.”
“That’s just not the case,” he said.
Internet Platforms Feel Pressure to Self-Regulate
Bad practices by ICO holders have led to increased scrutiny not only from government regulators, but also from independent platforms. Nicc noted that the restrictions that Google, Facebook, and various other platforms have placed on advertisements for cryptocurrency-related firms have fundamentally changed the way that advertising in the crypto industry works.
“What I’ve generally seen is a rise in specialist cryptocurrency channels.They offer ‘multi-level’ packages for exposure,” he explained. “The digital marketing side, the outright advertising, content, and PR starts to merge into one skill set.”
Social Media Marketing for Small Business: What You Need to Know? https://t.co/8qTzGZ1wIl#Expozive #Marketing #Content #contentmarketing #MarketingDigital #fintech #Crypto #forex #forextrading pic.twitter.com/BlG5QDab68
How the European GDPR Affects In-App AdvertisingGo to article >>
— Nicc Lewis (@Expozive) September 2, 2018
Therefore, Nicc says that he offers his clients “the ability to expose (firstly) through PR, secondly through content, and thirdly through advertising channels, like channels and paid content… that’s generally the direction it’s been going in from a more technical infrastructure-type standpoint.”
Social Media Influencers Play a Significant Role
“Above and beyond that, there’s also the need to go and approach individuals–influencer marketing in its most basic form. Looking for private bloggers, guys who have big followings on Twitter (in particular, if you’re looking into the US and Europe–in Europe, Twitter is much more important than even Facebook) and engaging with these guys in some kind of sponsorship to also get your message out there.”
Nicc explained that these influencers “tend to have a bigger trust factor than major media sites.”
“For example, you might find it easier and better to get your message through an individual who writes consistently and reports which ICOs are good and which are not than you would out of a PR on BBC…which might seem counterintuitive, but that’s the way it’s working.”
“So it’s kind of like a fragmentation where you need to spread your message really far and wide in order to get it out there.”
Fear is the Most Significant Driving Force Behind Regulators
We asked Nicc what his thoughts were on the SEC’s threats against John McAfee, who was one of the most notable social media influencers in the crypto sphere until June, when the United States SEC threatened to take action against McAfee for his advertising activity.
Nicc said that he believes that the SEC’s reasoning behind this is “a big fear of the scammers. Of the not-good guys.”
“That fear is a more driving force right now than anything else,” he continued. “That’s what leading to some of the decisions that are being made.”
He compared the current climate in the crypto industry to the history of binary options: ”I think there is an underlying fear that there will be another explosion of hard-sell, bad-guy binary options just disguised as ICOs. That’s the thing we have to take into account before we start thinking about how the regulators think.”
Individual Influencers Pull Out of the Race as Scrutiny Increases
“I’m not sure that the regulators are going to be the only people involved here. You can see that even the mention of the thought that possibly it might happen have led to individuals pulling out and saying, ‘you know, I’ll just back out right now–it’s not worth my time’.”
In this regard, “there’s a lot of self-regulation going on as well, in Europe and the US and Britain…I think the whole trend is to find a clean way through so that good ICOs can still make it in the market.”
“There is legitimate business out there, and there’s also the less-desirable side of the business. It’s the less-desirable side of the business that’s coming increasingly under the spotlight, and increasingly under attack,” Nicc said. He explained that this is also affecting the legitimate side of the industry.
“Until some kind of balance is achieved, it’ll be a game that goes backward and forwards with threats (from regulators) and people blocking (in response)…it’s difficult to actually have a clear picture” of what will happen, he added. “Obviously, the biggest problem is that cryptocurrency is without borders. A single state would have great difficulty to have a blanket regulation–there has to be some kind of understanding that it’s interstate rather than just intrastate.”