In 2018, social media platforms and search tools such as Facebook, Google, and Twitter announced that they would ban cryptocurrency advertising from their platforms and they largely followed through. Facebook as the first platform to end advertising and Google followed soon thereafter.
According to Google rep Scott Spencer, “We don’t have a crystal ball to know where the future is going to go with cryptocurrencies. But we’ve seen enough consumer harm or potential for consumer harm that it’s an area that we want to approach with extreme caution.” Two months later, various organizations in the cryptocurrency industry noticed their advertising streams disappear.
There is no doubt that cryptocurrency is unique, especially when it comes to what it is and its purpose. But, the apprehension experienced by media giants is similar to the same reception that most technology movements have received. For example, technology often goes through a four-stage process in which it is questioned, uplifted, challenged, and then adopted. People call this the mystery, buzz, clampdown, and maturation process.
The ban and scrutiny from the SEC, IRS, and international regulators have certainly made it a challenging environment for cryptocurrency. However, there may be hope. Recently, both Facebook and Google have shown some indication of potentially eliminating the bans. The potential outlook for cryptocurrency may be positive, especially considering the potential move to un-ban and the four stages of the technology adoption process.
Mystery is the first stage and it usually entails public conversation. When it comes to bitcoin, conversation started about ten years ago and many financial pundits treated it as a scam. For instance, The Balance reported that bitcoin involved illicit activities, such as purchasing drugs and shady transactions on the dark web. Although this is not false – remember Silk Road? – many should keep in mind that such instances should not and do not define cryptocurrency’s viability and its true purpose. Thereafter, many either saw cryptocurrency as a bubble bound to explode, or a revolution that would send fiat currency to its end.
Buzz is the second stage and here, though financial industry leaders may have had hope in bitcoin and its followers, more was needed. Buzz was generated in various discussion boards and email chains and this ultimately led to some acceptance on an individual level. Early adopters of crypto and blockchain brought the concepts into their businesses and to larger audiences. The organic evolution happened on a societal level, but regulatory hurdles still remained.
Clampdown is the third stage and it is the natural transition of bitcoin and cryptocurrency as they continued to experience move public attention due to massive increases in value, alleged issues with payments, potential elicit activity, and more adoption by large corporations. Worse yet, ICOs created a bad reputation due to their cash-grab schemes. As this occurred, cryptocurrencies received intense scrutiny from regulators, such as the SEC and Facebook and Google turned to banning advertisements.
Now though, the tide may be turning. Facebook recently came out with an approach that requires interested advertisers to fill out an application detailing the license they hold, the company they are representing, and to go through various background-check requirements before approval.
Maturation is the final stage. And though both crypto and blockchain face issues in this area and have not fully mastered it, the changing tide concerning Facebook and Google’s approach may lead to maturation. Of course, it will also be necessary for the IRS and the SEC to come out with a more definite stance concerning cryptocurrencies for any true maturation to happen.