Why Facebook became such a hotbed for ICO and cryptocurrency ads
Cryptocurrency

Why Facebook became such a hotbed for ICO and cryptocurrency ads

This is a contributed piece by Marcus Taylor, CEO of BrokerNotes

 

Crypto mania has been impossible to escape. Bitcoin news has flooded the web in recent months, countless articles have been dedicated to the next “hot” asset built on the blockchain, and many millions of ads have been seen and consumed by people all around the world that want a piece of the action.

A significant percentage of these adverts have ended up on Facebook. This made recent news that Zuckerberg and his team have immediately halted any and all adverts for crypto-related businesses and binary options, all the more surprising. The shift sent shockwaves through the market and has gathered support on both sides of the fence. Before we can weighh up whether Facebook’s decision was truly a good one, though, we need to establish why crypto advertisements are more popular on Facebook than anywhere else online.

 

Who is the average crypto trader anyway?

There’s no doubt that Facebook has a big reach. At last count, the social networking giant was closing in on the two billion active user mark. However, the value in crypto companies using Facebook as their platform of choice to target users becomes even clearer when you consider how the average trader falls into the social network’s core target demographic.

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18 to 34-year-olds now represent over 65% of all online traders. In fact, the number of traders under the age of 34 has increased year-on-year since 2014, which is almost certainly a direct result of mainstream marketing targeted specifically towards people in this camp. 75% of crypto asset traders fall into this age bracket, too, confirming what we’ve all suspected to be true for a while – the crypto market has found a particularly comfortable home with today’s younger trader audience.

It’s easy to see why and how Facebook has become a goldmine of opportunity for bolstering sign-ups and overall interest in ICOs. It’s an avenue for companies launching these new digital ventures to reach an audience that directly correlates with their target demographic. Facebook ads has within its considerable grasp a cross-section of users that are engaged with the crypto trend and an active interest in this type of investment. All things considered, then, does this mean banning ICO adverts on Facebook was a good idea? Absolutely.

 

Risk vs reward

Facebook’s made a great decision. Being able to promote innovative products to millions at the push of a button is a good thing, but the sheer number of scams out there are a massive risk to inexperienced traders who might merely be jumping on the bandwagon. And those risks outweigh the benefits of open and unrestricted advertising right now. After all, every con-artist targeting crypto traders raises questions over the general safety of crypto investments, so Facebook’s decision is helping to mature the market.

It’s also worth noting that the trigger cause behind Facebook’s ban was a series of user complaints about scams and misleading adverts, which suggests traders on the whole are wising up to the potential pitfalls associated with crypto investment. By limiting the means through which scammers can target those traders in the first place, Facebook is now part of the growing trend to move cryptocurrency away from being viewed as an unsafe, unstable asset.

The ban is broad, but Facebook has suggested it’ll allow legitimate crypto-based businesses to advertise once again in the future. This, too, is a positive move for the market on the whole. Crypto assets are still largely unregulated, and the market is in a constant state of flux. Preventing companies in this space from advertising their products until more stability is added will protect both the market and consumers in the long run.

Is an Initial Coin Offering (ICO) right for your business? Find out: Initial Coin Offering: Why the IPO of cryptocurrencies is suddenly popular

 

Playing the long game

Although Facebook’s decision does make it harder for legitimate ICOs or established crypto companies to raise awareness of their products, in the long term they’ll see far greater benefits from being part of a market that traders can fundamentally trust. And that’s got to be a good thing.

Yes, the move by Facebook was pretty drastic. However, the impact goes far beyond protecting its users from potential scammers looking to cash in on widespread crypto mania. For good or bad, Facebook has unparalleled global reach. In announcing this ban, it’s helped consumers to wise up to the potential pitfalls of crypto investment and shown the market that regulation is needed to see long-term success. Although this necessary kick into action has come in the unexpected form of Mark Zuckerberg the result is, on balance, positive for the crypto future.

 

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