The fall of the cryptocurrency markets is causing much more damage than previously thought. This is not only a blow to individuals, but also a real disaster for crypto companies. Hard hit by the current state of the markets, the latter are forced to cut their advertising spending. But not a little!
Large firms are cutting their marketing spending by almost 100%.
The financial crisis of cryptocurrencies is affecting many investors. From individuals to businesses, everyone suffers in their own way. While some remain calm and patiently wait for recovery, others are forced to face the situation and make decisions that meet immediate needs. While some governments say they are not resting on their laurels despite heavy losses, businesses are facing challenges that seem insurmountable.
Firms must make a profit in order to stay afloat. As a result, the current price in the financial market is harmful to most of them. Since the expansion of crypto assets, many crypto businesses have emerged. And in order to make themselves known, they need advertising so that their services are known to the general public. As such, some of them have invested heavily in marketing. In this case, Gemini and Crypto.com.
The second half of 2021 was a favorable time for the introduction of cryptocurrencies. With green indicators and convincing prices, it became necessary to invest in these assets. With Bitcoin all-time high in November, more and more companies are increasing their advertising budgets. What is the purpose? This is the introduction of crypto assets into the mainstream.
To do this, they spent millions to achieve their goals. As the markets crashed, they cut their advertising budget by about 90%. Thus, the cost of the Crypto.com advertising budget increased from $15 million in November to $2.1 million in May 2022. Moreover, they increased significantly in the run-up to the Super Bowl, valuing themselves at $40 million. At Gemini, spending fell to $478,000 in May from $3.8 million in November.
The fall of the cryptocurrency markets is pushing companies operating in this sector to revise their marketing strategy. While in November 2021, many platforms were doing their best to make themselves known to the general public, the current state of the markets is pushing them to reduce their costs. For Singaporean crypto businesses, the current correction is forcing them to cut their spending not by 40% or 50%, but by 90%!
However, they are not the only ones facing bearish prices. Coinbase (NASDAQ: COIN) is forced to suspend advertising spending. After spending almost $31 million on marketing and advertising in February, the company is now forced to lay off some employees and put hiring on hold to stay afloat.
Meanwhile, other platforms like FTX are increasing their ad spending. Indeed, the budget of the cryptocurrency exchange increased from $3 million in November to $5.2 million in May. In addition, she has hired former basketball star Shaquille O’Neal as her celebrity ambassador. In this context, competition becomes fierce and staying the course becomes a necessity.
The current course of crypto markets affects many crypto businesses. Even if the predictions of some experts regarding the future of cryptocurrencies are optimistic, the fact remains that platforms are currently in crisis. Reducing ad spend is an option for many of them. However, the competition is fierce and it is difficult to stand out in the market. Some exchanges are instead increasing their spending despite the crypto crisis, which complicates matters.
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The world is changing and adaptation is the best weapon to survive in this changing universe. As a manager of the crypto community at the base, I am interested in everything that is directly or indirectly related to the blockchain and its derivatives. To share my experience and talk about a field that interests me, there is nothing better than writing informative and laid-back articles at the same time.