Do Cryptocurrencies Need Branding?
The crypto world is fascinating. Getting into it is rather easy and it is estimated that 10% of the world’s population have already invested in crypto currencies. The average investor is young (under 40), a savvy digital native, yet not particularly well-off: cryptocurrencies are very popular in some developing countries.
The investment premise is that cryptocurrencies are the future of money, free from borders and state controls, as blockchains provide the necessary authentications. In the long run, their value will rise, whatever extreme fluctuations may affect them along the way. The market, however, lacks a framework of enforceable rules and controls in which to operate.
Like at the time of the gold rush (interestingly, 'mining crypto' is the dedicated term when new coins are issued), everyone has a chance, although many are unlikely to strike gold. There is no minimal value and most coins aren’t underpinned by physical assets or securities. It’s no surprise that scams are rife in the wild west of cryptocurrencies. A famous example is a scheme devised by the Cryptoqueen, who sold One Coin to would-be trusting investors. When the scheme collapsed, she disappeared with a real fortune - $4bn!
Taking stock of recent events, an article in the New York Times titled 'Crypto Meltdown Forces a Rebranding' actually raised the question: have cryptocurrencies ever been branded? And could they? A brand isn’t a vague promise that people can adhere to, it’s one that delivers in the real world. Proof-points are an integral part of the brand experience, in the physical world and in the digital world. Most of all, brand equity is built on hard-earned trust. It takes years and a lot of hard work to build a decent brand. Could cryptocurrencies today be considered brands?
It is striking to compare communications from leading mainstream brands with that of the major cryptocurrencies. In the world of brands, consumers have high expectations, they are demanding, and they have the power to make or break a brand if it doesn’t deliver on its promise. By contrast, when it comes to crypto, it’s astounding that the average investors does not apply the same rules they would before buying an expensive product or service, especially in the age of super-scrutiny on social media. The crypto world looks like it lives in a parallel universe, very advanced in some ways, antiquated in other ways.
Still, some crypto companies have spent significant amounts to stand out in an increasingly competitive market. Crypto.com is behind a commercial that was broadcast during the Superbowls final, the most expensive ad spend one can imagine. In it, a famous actor states that 'Fortune favours the brave', citing heroes who put their life on the line and succeeded against the odds. When the company reported huge losses, the spoof ad was just too tempting; its signature was 'You can’t spell crypto without cry'. The signs were there: when you single-mindedly risk everything, the odds can turn one way or another. The statement was bold but it lacked a promise the brand couldn’t make.
Of course, all investments are subject to risk but, despite attracting a lot of would-be traders, cryptocurrencies are still relatively new products that have yet to demonstrate they are a wise long-term investment. The cryptocurrency market is full of jargon, it lacks the substance and clarity of great brands. On its website, a leading crypto fund features an About Us page that is just 15 words long. The rest of the page is simply blank. The name of the founders is mentioned in the 15 words, however one of the links to their profile is broken. Is it a real or a virtual person? How can this kind of oversight inspire confidence?
Visually, black and white are widely used on crypto currency sites, publicly available information is scarce, there are no visuals that people could identify with, not even a token vanilla stock photo. A bit like taking a trip down the early days of the world wide web in the late 90s. No wonder that the public image of crypto currencies is still rather negative: cyber security threats, bad publicity, unethical behaviour are widely shared perceptions.
Maybe the industry is learning some valuable lessons from its spectacular ups and downs that gave them that unreliable reputation. The well named Stablecoin has started attaching the value of its currency to real-world assets, anchoring it to the real world. Ethereum, one of Bitcoin’s main competitors had just adopted a more sustainable stance, promising to cut on the massive energy consumption that cryptocurrency trading normally incur. When the market has recovered, its protagonists can invest in building proper brands.
