FTX and Market Tumble Force Crypto Brands to Reposition Themselves

The transgressive future of finance was once marketed as crypto. Trust, dependability, and transparency are now its core messages. 'Boring is not bad,' said one crypto chief.

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The crypto industry made a splash when a few heavyweights began airing swaggering advertisements for the 2018 Super Bowl, teasing messages like “Fortune favors the brave” and “Don't miss out”.

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As soon as crypto suffered a swoon, FTX went bankrupt.

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Marketing and public relations are now being used by companies across the sector to defend their brands, distance themselves from questionable actors, and, in some cases, present a friendlier face to investors and regulators.

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Tom Wason, global principal at Wolff Olins, a strategy firm that has worked with top crypto brands, said: "The problem they face is a massive drop-off of trust as holders of assets with value." According to him, crypto companies are striving to continue growing and staying in business while reassuring both crypto believers and government agencies under pressure.

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According to Mr. Wason, their marketing needs to follow suit. VC money was burned for awareness in the 2000 Super Bowl during the burst of ads for dot-com startups.

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Conceptualizing a New Approach

Advertisements by crypto marketers had dropped significantly before FTX's bankruptcy in November. Companies were forced to reevaluate their strategies following it.

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After FTX dominated the news cycle, OKX canceled its ad purchase for Super Bowl LVII. As a result of OKX's decision to stay away from this month's Super Bowl, Haider Rafique, global chief marketing officer, said consumers are more responsive to campaigns that emphasize transparency and trust. The OKX decision was first reported last week by Ad Age.

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The top two TV advertising spenders, Coinbase Global Inc. and eToro Group Ltd. increased their broadcast TV advertising expenditures to $2.8 million and $1.9 million, respectively, in December, respectively. Even though the amounts are lower than a year ago, they have grown significantly from paltry sums a few months ago.

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In order to adapt to the changing environment, their messaging has changed.

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In response to FTX's bankruptcy filing, Coinbase published a full-page print advertisement in The Wall Street Journal bearing the headline "Trust us." The company also announced its new slogan, "Ignore the noise." In an advertisement run in December, Coinbase emphasized its reliability as a publicly traded company regularly audited by the SEC and ran directly against negative press.

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Kate Rouch, Chief Marketing Officer at Coinbase, said the company aims to maintain its position as the most trusted brand in the crypto community.

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A digital asset exchange, Bittrex Global GmbH, moved to reposition itself with a December campaign calling itself "the world's most secure and regulated exchange."

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According to Bittrex Global Chief Executive Oliver Linch, "one of the biggest fears among crypto participants is that they may or may not take their money with them."

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He said it's truer now than ever before. Since the company launched its new advertising campaign in 2021 with a tagline of "Don't let them decide what you should trade," Bittrex Global is emphasizing reliability, he said, adding, "Boring can be good."

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A new campaign from Etoro, "Originality Is Overrated," suggests that crowdsourced insights may still be of interest to investors, given the platform's social media-like features.

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In the United States, EToro will carry on with its marketing efforts throughout this year, announced Chief Executive Lule Demmissie. "Now seems to be the right time to move forward. Whenever things are tough for people, you show up for them.

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Contagion Prevention

Crypto's miasma has enveloped the sector, prompting some exchanges to act as if nothing has changed.

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A collection of NFTs featuring Cristiano Ronaldo was launched by Binance Holdings Ltd. in November. FTX filed for bankruptcy on Nov. 11, but Binance said they developed the campaign before that date.

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Patrick Hillmann, chief strategy officer for Binance, said that future marketing will focus more on the products that the company offers, rather than distinguishing FTX from Binance or addressing increased scrutiny of its own operation.

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In addition to its Twitter and TikTok ads, OKX ran its introductory “What Is OKX? On its platform, which is not yet available in the U.S., the company launched an awareness campaign on Trade Algo’s streaming properties. There are also race cars and a centaur, all harking back to crypto's early hipster-fantasy sensibilities. The company, according to Rafique, aims to focus on responsible investing without directly addressing recent turmoil.

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The industry has also been spending more on public relations and lobbying in recent weeks, with many crypto players hiring new firms or expanding their current ones.

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It is difficult for decentralized finance businesses to differentiate themselves from centralized exchanges that rely on intermediaries like FTX and Coinbase in order to trade assets.