So far, 2020 has been a big year for crypto. It is almost as though the bullish predictions that were being made about Bitcoin in late 2017 are starting to come true: more people are entering the space, BTC’s price is climbing ever higher, and institutional investors are entering crypto in a more serious way.
As crypto continues to get bigger, its reach is also growing. Over the last week, crypto may have reached millions of new potential users with appearances in new places, specifically in the mainstream media.
Grayscale and Galaxy Digital, two firms that offer crypto-based investment products, respectively ran a television and print ad campaign this week. At the same time, Barstool Sports founder and investing influencer Dave Portnoy, aka ‘Davey Day Trader’, has brought the spotlight on Bitcoin with a Twitter video of his own. Which is more effective for crypto?
Grayscale’s Ad Touched on the Politics of Inflation
Indeed, investment firm Grayscale, which recently dropped $250 million directly into Bitcoin, has been showing an advertisement on television and social media for its cryptocurrency investment funds. The ad is running on CNBC, MSNBC, Fox, Fox Business, and other channels.
— Grayscale (@Grayscale) August 10, 2020
“People decided to put all that [monetary] value into a piece of paper, then proceed to wave goodbye to value, printing unlimited amounts of money as they passed the buck to the future. That’s why it’s time for digital currency,” the ad says, before flashing a list of Grayscale’s digital currency investment fund options.
Galaxy Digital’s Ad Struck an Emotional Chord
At the same time, Galaxy Digital, the cryptocurrency merchant bank founded by billionaire Mike Novogratz, ran a full-page ad in the Financial Times. CoinTelegraph reported that the UK-based newspaper had more than a million subscribers in 2019; roughly 20 percent of those subscribers are millionaires.
Unlike the Grayscale ad, which takes a stab at monetary policy and inflation as an incentive to invest in cryptocurrency, Galaxy Digital’s FT ad took a more emotional angle.
“In uncertain times, bitcoin is a hedge independent of the hegemony,” the ad reads. “The world is in flux, and the status quo is shifting before our eyes. As we grapple with so much economic uncertainty, we ask ourselves, ‘what is the new normal?’”
The ad then proceeds to plug Bitcoin as an “investable store of value asset that operates independent of the traditional financial system.”
Big ad for bitcoin in the FT today from Galaxy Digital. Love it pic.twitter.com/ro05QdvDFf
— Barry Silbert (@barrysilbert) August 13, 2020
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While it is unclear how effective these new advertisements will be when it comes to onboarding new crypto users and investors, the introduction of these ads onto major platforms certainly represents a shift in the crypto industry’s relationship to advertising practices.
In the past, ads for cryptocurrency investment products have been met with high levels of scepticism because of their association with fraud (often with good reason). In early 2018, Facebook, Google, Twitter, Snapchat, and others placed sweeping bans on advertisements on anything related to cryptocurrency; the bans were lifted later the same year.
Additionally, the appearance of cryptocurrency advertisements in print in particular seems to represent a stark tactical change from the crypto ad campaigns of the past.
Speaking to CoinTelegraph, Joshua Frank, co-founder and CEO of crypto data aggregation platform The Tie, said that “a few years ago I would have never expected a print advertisement related to cryptocurrency. I think the transition to the Bitcoin as a digital gold narrative is the reason that a print ad has been pursued. Trying to get an older generation who invests in gold to view Bitcoin as a digital alternative.”
And indeed, Galaxy Digital’s print ad would not be the first time that the merchant bank has targeted older investors. In November, the bank launched the Galaxy Bitcoin Fund and the Galaxy Institutional Bitcoin Fund, two funds targeted toward the ‘wealth of America’: wealthy individuals between 50 and 80 years of age.
Influencers May Play the Most Powerful Role When It Comes to Bringing New Investors into Crypto
While the effectiveness of the television and print ads remains to be seen, there seems to be growing evidence that influencers in the crypto and financial worlds may be having a significant impact on bringing new investors into crypto.
Joshua Frank told CoinTelegraph that beyond the cryptosphere influencers have played a key role: “it hasn’t been TV or print advertising that has driven the Robinhood rally, it is Tik Tok influencers and Dave Portnoy.”
— Dave Portnoy (@stoolpresidente) August 13, 2020
Dave Portnoy, founder of Barstool Sports, has developed a following as an investing influencer under the nickname “Davey Day Trader.” Bitcoin famously rose 2.6% after Portnoy posted a video of himself buying $200,000 worth BTC with the help of the Winklevoss twins. The bump in the price of Bitcoin following the posting of the video has since been dubbed “the Portnoy effect.”
If $BTC breaks 12K today everyone and their mothers will be talking about the Portnoy effect.
— Alex Krüger (@krugermacro) August 13, 2020
Indeed, “Portnoy, Barstool, and Tik Tok can drive the next wave of users to digital assets,” Joshua Frank said. “Influencers and social media drive retail flow, and retail flow attracts more institutional clients.”
What are your thoughts on what is more effective for crypto adoption, influencers or traditional ad campaigns? Let us know in the comments below.