Joanna Seddon, Managing Partner, Presciant
The earthquake created by the bankruptcy of FTX has tarnished the brand of cryptocurrency as a whole, and led to a collapse of cryptocurrency values, which had already been impacted by inflation. It’s an ugly mess. Much has been lost, especially trust. Everyone is desperately distancing themselves. The Miami Heat is running away from its $135M licensing deal with FTX and taking the brand off its stadium.
This matters. Cryptocurrency isn’t small. Revenues are projected to reach $35B this year, and $74B by 2027. People are using it. Major players include Microsoft, PayPal, Intel, AMD, NVIDIA. In some countries, including El Salvador, it has been adopted as official currency, in others, such as Australia, there have been moves to put the entire financial system on blockchain (just canceled). New York City mayor Eric Adams has been taking his paycheck in crypto. Few people are aware of this, but there are more than 2000 retailers in the USA that accept crypto payments including AT&T, Burger King, Pizza Hut, Overstock, Miami Dolphins and the Dallas Mavericks.
Why are people using it? It’s not just a fad. It’s not just criminals taking advantage of the fact that, at least for now, it is unregulated. It is one of the most useful applications of blockchain. Blockchain is one of the technologies of the future, due to its ability to transfer data in a way that is secure and decentralized, and yet transparent—the code is open to all. This gives crypto some major advantages over traditional currency. It goes directly to your digital wallet. It is extremely difficult to interfere with transactions or manipulate them. It’s faster, cheaper and easier than sending money the traditional way, because it cuts out the intermediaries—the banks.
Cryptocurrency is a solution to a problem, it serves multiple unmet needs, one of which is an efficient customer experience for smaller international remittances. Have you ever tried to send a small amount of money overseas? It’s not easy. There are lots of barriers—country government regulations, profit margin challenges and exchange rate reconciliation. Crypto can solve for this.
Crypto tends to be talked about as the currency of the dark lords of the underworld. But in reality, it is no worse than cash. Money laundering has long been a plague for banks and regulators. Over the centuries exchanges of value have had many different guises, from barter, to gold, to coins, to paper money. Crypto is just the next step. It needs the help of branding to grow up.
Even before the FTX debacle, crypto was a brand mess. A soup of name confusion. The Bitcoin brand name is often used interchangeably for crypto. That’s a brand problem not only for Bitcoin but for the whole crypto sector. There are 21,000 blockchain companies and coin names out there, of which 9000 are active, and more than 500 exchanges and more than 300 million crypto users around the world. Of the better known companies trading in the tens of billions, there is Ethereum with Ether, Ripple with XRP, Tether with Tether Token, Litecoin which like Bitcoin has only one name, Binance is the largest exchange but also has Binancecoin or BNB. It’s no wonder that we get confused.
People don’t understand cryptocurrency. A mix of wild exuberance, fear and cynicism prevails. Banks are not motivated to educate society about crypto, so positive stories are not told, education is not happening.
Brand is the solution. Blockchain businesses need to tell their stories and build their brands. Branding brings clarity and simplicity to complexity, it’s just what the sector needs.
How can brand help stabilize and lift crypto companies? What needs to happen:
- Construct an industry brand architecture. Help people understand what’s going on. Explain the difference and end the confusion between currency and exchanges, blockchain and crypto. Make it clear that there are many products, not just Bitcoin.
- Tell stories. Explain crypto’s benefits. Solve for “why should consumers care.” Communicate crypto’s uses and advantages at the category level, versus traditional currency. Generate goodwill.
- Create differentiation. Develop distinct brands. Crystalize the purpose and positioning of individual crypto companies. Separate from competitors who might sink. Forge distinct USPs and target markets.
It is time to change-up the conversation and pave the way for greater appreciation and comprehension. If the sector doesn’t shape its own space, who will? A new global value system has been created, but now is floundering. Why do successful companies invest in branding? It provides protection and differentiation when facing headwinds. The storm is upon us, and “Brand” is the ballast.