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Anyone with a passing familiarity with cryptocurrency will know that the market has been in a downward slide since November 2021. Ever since Bitcoin hit $69,000 back then, the market has been shedding value on an almost weekly basis, losing 75% of its market cap in the 12 months since the 2021 high point. This may seem drastic, but this is in fact well in line with a typical crypto bear market – the 2018 bear market saw the market cap drop by 87% within a year, so this time round is actually an improvement – so far. However, downturns also present great opportunities, both for crypto investors and for those running crypto projects, which this piece will discuss.
Crypto Downturn Impacting All Sectors
Many people attribute the crypto downturn to the collapse of FTX, but this only happened at the start of November this year, a year after Bitcoin’s $69,000 all-time high. What followed this was a typical reversal in price, such as we have seen after every market cycle tops out. The collapses of the likes of Terra, Celsius, Three Arrows Capital, and then FTX merely exacerbated the impact of the bear market, potentially taking the valuation of the crypto market down to where it usually goes, only quicker.
It isn’t just the crypto market that has suffered in the past year – the NFT market has taken a battering too. Many top collections, such as Bored Ape Yacht Club, are down 50% from their 2021 highs, while the number of sales on a daily basis has also halved since NFTs were the talk of the town.
How Can You Take Advantage?
So how can you and your project make the most of a crypto crash? The first is to use the time to rethink your marketing plan. Crypto winters are typically when quality projects do most of their building, free from distracting talk of price action. This quiet period is a great time to rethink your marketing plan, especially given the opportunities that a bear market throws up – if you know where to find them.
A crypto downturn is a time when many companies tend to go into reverse when it comes to marketing, meaning that there is less competition and more chance of your advert standing out from the crowd. You can try doing this by yourself, but employing the expertise of a company like Bitmedia, which has been helping crypto companies navigate multiple bear markets, is your best bet for making your budget go further.
If you do choose to go it alone, you’ll be pleased to know that most outlets that run crypto adverts have discounts during bear markets, so make the most of these to really get your name out there through clever banner advertising.
Don’t forget that crypto influencers also keep going through a bear market, also probably dropping their prices in the wake of a crypto market downturn, so this is something certainly worth exploring too.
There is a very good reason why you should ensure that you have a clear strategy in place for advertising during a bear market – projects that continue promoting during fallow periods come out of the crypto winter with their reputations enhanced. Companies that advertise during a crypto downturn and continue to do so into a bear market will be recognized as serious players that are able to manage their resources effectively, standing them in good stead for the next cycle.
Crypto Downturn Can Benefit Crypto
If you are invested in cryptocurrencies on the side, then a bear market is rarely a fun place to be, unless you managed to sell somewhere near the top. Crypto downturns are a chance to evaluate your investing style (did you hold on too long, did you trade too much) and identify trends you want to change for the next cycle. As a general rule of thumb, thinking long term is usually much more successful than thinking short term – the crypto market cycle takes years to play out, so if you’re thinking about what to do right now, have a timeframe of years rather than months or weeks.
There is also a net benefit to the crypto space experiencing the kind of downturn that it has, especially with the fall of the likes of Celsius and FTX. These platforms rely on credit or leverage trading, areas of the crypto space that are not suitable for the vast majority of crypto investors. The collapse of these platforms will allow the space to cleanse itself of some of these dangerous practices and reduce the risk novice investors face.
The downturn will also allow investors to focus on the merits of cryptocurrencies rather than their short-term price action. The crypto winter will allow projects with utility tokens such as Ethereum, Cardano, and Solana to solidify their use cases, ensuring that they come out of the market downturn with a more comprehensive argument as to why their tokens should be used rather than coins to be speculated upon.
According to Bitmedia CEO Tanya Petrusenko, these types of projects will be the ones that lead the new wave of crypto adoption:
“In this sense, they facilitate decentralised finance (DeFi) transactions, allow non-fungible tokens (NFTs) to have a value, and ultimately are the currency of new Metaverse applications. They are the future. The good news is that we can start to see these tokens as sources of value and not as cryptocurrencies in the proper sense.”
Petrusenko also believes that the crypto landscape right now is where the internet bubble was in 2001, where speculation on unproven business models had come and gone and the true business models that had the internet as their core could finally come up to the surface.
Crypto Brands Need to Focus on Utility
When it comes to how advertisers and marketers need to handle the crypto winter, they should be focusing on utility above all. Encouraging speculation, whether by baking it into the protocol or advertising it in such a way, only breeds mistrust – a mistrust that is hard to reverse.
The crypto winter will fundamentally alter how crypto projects will be marketed for the foreseeable months and years. Ultimately, crypto brands will have to advertise more like the institutions they’re looking to replace, with savvy, tailored advertising that maximizes their budget.
Those that can master the bear market will be the ones that come out of it with their reputations enhanced, but in this respect, it is like trading cryptocurrencies – in a bull market everyone can get lucky and think themselves a genius, but a crypto winter is where the real winners are made. This is where Bitmedia’s experience can play a huge part – our targeted campaigns can help you become a bear market winner, without having to go through the painful learning process, and potentially wasting your precious marketing budget along the way.