After a rocky patch, it looks like crypto is back. Have the excitable advocates for digital assets learnt anything?
Do you remember the distant past of December 2022?
That was when the price of Bitcoin troughed at just under $14,000 USD, having tumbled from almost $50,000 USD just over a year before.
This meant that for a lot of the early months of 2023 there were many predictions that the crypto moment had come and gone. Bitcoin and Ethereum and all the rest were, they said, relics of the pre-Covid ZIRP era, finally torpedoed by the climactic collapse of Sam Bankman-Fried’s supposedly game-changing exchange FTX. There were too many scams, NFTs were ridiculous, the gap between the technology’s promise and reality was too great, for a supposed form of money it looked a lot like the only viable use case was speculation – the list of criticisms was long, and most of them hard to refute.
And yet the price of Bitcoin – usually a decent index for the overall vibes around the crypto ‘space’ in general – spent most of 2023 steadily climbing. It closed the year nowhere near its all-time peak, but still managed to double in value year-on-year – not usually the behaviour of an asset whose time has passed.
So what’s going on – and what does it mean for communications professionals?
There are a few broad factors driving the crypto rally, chief among them the long-awaited signing-off last week by the US Securities and Exchange Commission (SEC) of exchange traded funds (ETFs) that invest directly in Bitcoin. This week JP Morgan research was released suggesting these funds could attract inflows of up to $36 billion.
Big American asset managers like BlackRock and Franklin Templeton who had already set the basis for listing these products, are now finalising the upcoming launches , and given the absolutely enormous scale of both the US institutional and retail investment pools, this is hugely supportive for the value of Bitcoin, which in turn tends to drive up the value of other cryptocurrencies.
But how do we talk about it?
In the past, communications strategies even tangentially connected to crypto have been notoriously rich in bullshit. Whether the ICO wave of 2017-18, the NFT boom that followed it or the excitable tone around DeFi (decentralised finance) in the last few years, every project is constantly on the cusp of revolutionising everything it touches.
However, people aren’t stupid. Bitcoin has been in use since 2009, coincidentally the same year Uber and WhatsApp launched. Most people reading this have probably used either or both these services in the last few weeks – have you used Bitcoin or any other cryptocurrency recently?
The technology clearly has limitations when it comes to its stated use case. Instead of a new form of money, crypto’s main use is as a speculative asset – one with quirks and drawbacks, to be sure, but it’s now matured to the point where big, boring firms want to offer it to their domestic clients in the US.
Bitcoin used to promise to change the world – soon, it’ll be just another component in Americans’ retirement portfolios.
This means our comms strategies need to evolve too.
But will they?