- As people’s interest in crypto has skyrocketed, 2021 was a record year for the market – and nearly every major media outlet started to report on crypto developments.
- Our media analysis found that Biden’s new tax rules and China’s ban on crypto trading made regulation the most pertinent topic in the debate, while exchanges like FTX, Coinbase and Binance emerged as the most influential organisations.
- We suggest that crypto firms should avoid the mistake that social media companies made by not communicating directly with Washington, while leaning on PR pros to engage in community management.
Many commentators called 2021 a “breakthrough,” when it came to the cryptocurrency market. People’s interest in crypto has skyrocketed: it’s now a hot topic not only among investors but in popular culture too, thanks to everyone from superstars like Elon Musk to that kid from your high school on Facebook.
Perhaps this was due to the fact that 2021 was a record year for the market, which briefly surpassed $3 trillion in value in November. The steady stream of news on cryptocurrency adoption by banks, the growth of nonfungible tokens on virtual gaming platforms, the launch of bitcoin futures-based U.S. ETFs and a need among investors for diversification in an uncertain interest rate environment have pushed several blockchain tokens, including bitcoin and ether, higher since October 2021.
Bitcoin, the largest cryptocurrency by market value, and ether, the second-largest, hit all-time highs, while altcoins, like meme-inspired dogecoin, surged in popularity. Against this backdrop, U.S. government officials and the Biden administration have increasingly expressed interest in new regulations.
Moreover, blockchain-based applications, including decentralised finance, or DeFi, garnered interest from both retail and institutional investors, pushing the growth of Web3, which is the decentralised iteration of the internet based on blockchain technology that powers NFTs and underpins cryptocurrencies.
For a technology that itself keeps developing and sees dozens of micro trends every year, having an overarching overview for the entire debate might be a tall ask. However, sifting through all the noise around crypto is an indispensable stepping stone for any comms effort in that overcrowded space.
Regulation and market acceptance reign over the debate
Analysing 1,915 English-language articles published in top tier outlets during the last 6 months, we found that Regulation continues to be the main topic of interest to journalists.
The Regulation topic has long been pertinent in the crypto industry as governments are continuously trying to exercise control to reduce the high volatility of the market, mitigate the damages associated with massive sell-off, minimise crypto usage for illegal businesses and keep an eye on crypto sharks.
In 2021, there were a lot of significant regulations on cryptocurrencies, with China altogether banning all crypto-related activities and the U.S. authorities regulating certain aspects of the market. The media coverage around regulatory announcements tends to initially influence the price of cryptocurrencies, but commentators generally agree that regulation is a good thing for the industry: reasonable rules are a win for everyone as it gives more confidence to investors.
The Market adoption topic followed mainstream companies across multiple industries that took an interest — and in some cases, themselves invested in — cryptocurrency and blockchain. AMC, for example, announced it will be able to accept Bitcoin payments, and fintech companies like PayPal and Square are also betting on crypto by allowing users to buy on their platforms. Tesla continues to go back and forth on its acceptance of Bitcoin payments, though the company holds billions in crypto assets.
Experts predicted more and more of this buy-in, with some expecting bigger, global corporations like Amazon jumpstarting this adoption even more in the latter half of this year. Indeed, Amazon has recently sparked rumours that it’s making moves to that end by sharing a job posting for a “digital currency and blockchain product lead.” Walmart is also recruiting a crypto expert to oversee its blockchain strategy.
The Trading/Price swings topic has been closely connected to these themes, as both regulatory announcements and company initiatives inevitably impact the value of particular coins. One of the top-trending pieces of news on the trading front was the launch of the first U.S. futures-based bitcoin ETF: in October, the ProShares futures-based bitcoin ETF made its market debut on the New York Stock Exchange under the ticker “BITO.”
Meanwhile, the Sustainability topic started gaining steam, with more and more publications scrutinising the energy costs of crypto mining. The Cambridge Bitcoin Electricity Consumption Index indicated that Bitcoin, the most widely-mined cryptocurrency network, uses 122.87 Terawatt-hours of electricity every year—more than whole countries like the Netherlands, Argentina, or the United Arab Emirates. According to Digiconomist, a cryptocurrency analytics site, a single Bitcoin block may consume more than 2,000 kilowatt-hours of electricity to be mined, which equals the amount of power consumed by the average American household over 72.2 days.
Another emerging trend within the industry is the rising popularity of NFTs. When Mike Winkelmann, the artist known as Beeple, sold his piece called “Everydays: The First 5000 Days” as an NFT in March, it was historic for a number of reasons. For one, the sale made Christie’s the first major auction house to sell a fully digital, NFT-based piece of artwork. Also for the first time, Christie’s allowed ether as payment for the artwork’s principal price. And the $69.3 million sale price for the NFT was record-breaking at the time. This sale prompted mainstream coverage of NFTs that wasn’t seen before.
The use of crypto and NFTs within various metaverses was also a topic of great interest. Metaverse tokens, the currency used to participate in many virtual experiences, were some of the best-performing cryptocurrencies this year. Shopping is a big part of the platforms that make up this emerging virtual world, from buying designer clothing to purchasing a virtual house next door to Snoop Dogg.
Governments as main protagonists
The Regulation topic put many governments and their regulatory agencies in the media spotlight, with the two largest economies – US and China – leading the way:
In the US, President Joe Biden signed the bipartisan infrastructure bill into law, which includes tax reporting provisions that apply to digital assets like cryptocurrency and NFTs. This caused an eruption of concern from the cryptocurrency community, and many lobbyists emerged, pushing for more clarity in the definition of “broker.”
Critics worried that as written, the provision’s definition of a “broker” is too broad. Cryptocurrency advocates are concerned that the current language could potentially target those without customers who wouldn’t have access to the information needed to comply. In response to these fears, the U.S. Treasury Department said in August that it will not target non-brokers, such as miners, hardware developers and others.
In the meantime, China confirmed its continued crackdown on cryptocurrency, making all crypto-related activities illegal, including services such as trading digital assets, order matching, token issuance and derivatives. In addition, overseas crypto exchanges providing services in mainland China are also illegal.
China’s renewed crackdown on bitcoin mining throughout the year pushed the market elsewhere, and in October, data from the University of Cambridge showed that the U.S. became the No. 1 destination for bitcoin miners. The data stated that 35.4% of bitcoin’s hashrate, which is the collective computing power of all miners, was in the U.S. as of July, overriding China for the first time. Cambridge also found that China’s average monthly share of the global hashrate in July zeroed out, which was a major reversal from September 2020 when China captured about 67% of the market.
India‘s government will introduce a bill to ban private cryptocurrencies and create a framework for central bank-backed digital money. The proposed bill “seeks to prohibit all private cryptocurrencies in India”, and comes after Prime Minister Narendra Modi warned that Bitcoin presents a risk to younger generations and could “spoil our youth” if it ends up “in the wrong hands”.
The small country of El Salvador made headlines worldwide for passing a new law to adopt bitcoin as legal tender, becoming the first country to do so. The law allows bitcoin to be used as payment for goods and taxes in El Salvador. Businesses can price their goods in bitcoin, and exchanges will not be subject to capital gains tax, CNBC reported. The change means businesses should accept payment in bitcoin alongside the U.S. dollar, which has been El Salvador’s official currency since 2001 and will remain legal tender.
Proponents said this will lower commission costs for billions of dollars sent from abroad but critics warned may fuel money laundering and increase regulatory and financial risks for the Central American nation. Polls also showed Salvadorans are wary of the volatility of the cryptocurrency, which can shed hundreds of dollars in value in a day.
Altcoins in focus
Naturally, bitcoin has been the most widely discussed cryptocurrency – especially since it was the first one to be declared a legal tender in a country. But we thought it would be interesting to see which altcoins (coins other than bitcoin) sparked media interest.
Ether, the world’s second-largest cryptocurrency, hit an all-time high in November, catching up with bitcoin’s rally and riding on news of wider blockchain adoption. The cryptocurrency extended its gains after the U.S. Federal Reserve announced a tapering of its asset purchases, but held to its belief that high inflation would prove “transitory” and likely not require a fast rise in interest rates.
Dogecoin, created as a “joke”, making fun of the wild speculation in cryptocurrencies, became mainstream thanks to Elon Musk. Just before Musk made his “Saturday Night Live” debut, the price of dogecoin began to spike, but it quickly retreated from that peak. As Musk appeared on the show, dogecoin fell as much as 29.5% and dropped to 49 cents at one point.
This was perceived as representative of the roller-coaster run that dogecoin had all year, most of which had to do with Musk. The Tesla and SpaceX CEO has been a consistent supporter of the meme-inspired cryptocurrency. Dogecoin’s rally first began in February after a series of tweets from Musk, and since, he has continued to hype up the digital coin.
Tether, supposedly backed 1:1 by the US dollar, was launched in 2014 to a relatively subdued market response. Interest started to accelerate in 2017 when Bitcoin hit new highs around $20 000 and investors looked for a place to park their profits. Tether offered a cost-effective way to shift profits into a stable asset backed by US dollars, and that pushed the Tether supply from $1 million in January 2016 to $1.4 billion by 2020 and $78 billion by February 2022.
There were suspicions that Tether was not fully backed by the assets claimed by the issuer, the Tether Foundation, which was found by the US government to have made “untrue or misleading statements and omissions of material fact” and fined.
Some commentators remarked that Thether’s rise to prominence is a sign that stablecoins – a subset of cryptos typically backed 1:1 by fiat currencies – have exploded in popularity in the last two years.
And recently, Solana Labs, a company with a native cryptocurrency, introduced Solana Pay, a payments platform that could revolutionise how merchants and customers interact with each other. If the execution and ultimate user adoption is there, analysts expect that this project will prove that cryptocurrencies do possess real-world utility.
Exchanges, banks and fintechs
We used Commetric’s proprietary ‘media conversation impact score‘ metric to identify the organisations with the biggest impact on the media discussion around crypto.
We determine an organisation’s media impact in the context of a topic by looking at its media influence score calculated in terms of coverage by high-profile media outlets, topic relevancy score measuring its contextual relevance, and media visibility as measured by the number of mentions.
We found that crypto exchanges like FTX, Coinbase and Binance were among the most influential organisations.
Bahamian cryptocurrency exchange FTX made headlines in January 2022 when it raised $400 million in its first external fundraising round. The investment gave FTX U.S. a valuation of $8 billion, placing it among the world’s most valuable private crypto firms.
The deal was seen as showing that start-up investors’ confidence in the nascent digital asset industry hasn’t been shaken, even as the prices of bitcoin and other tokens have fallen sharply at that time. In sharp contrast to FTX‘s success, the crypto market has lost some $500 billion in value since the start of the year, led by steep losses in the likes of bitcoin and even the popular altcoins of 2021.
FTX also owed its influence to the news that it hired superstar businessman and presenter Kevin O’Leary as an official spokesperson. The firm also uses sports as a marketing vehicle, announcing a long-term partnership with the Mercedes-AMG Petronas F1 Team that added the FTX logo to the cars and uniforms of drivers Lewis Hamilton and Valtteri Bottas. Other FTX brand ambassadors included NBA player Stephen Curry. And in October 2021, FTX ventured into cricket by signing a global deal with International Cricket Council starting with the T20 World Cup held in UAE.
The second most influential company in our sample, Coinbase, the biggest crypto exchange in the US, ran a Super Bowl ad that generated such massive traffic that its app crashed. For a full 60 seconds, the ad consisted of a colourful bouncing QR code that, when scanned, brought the user to a promotional website where, as part of its “Less talk, more Bitcoin” campaign, new customers who sign up by Feb. 15, 2022, will get $15 worth of Bitcoin.
But not all was milk and honey for Coinbase – the SEC threatened to sue the trading app if it launches a product called Lend, which would allow users to earn interest on their crypto holdings. Coinbase also said it wants a special regulator to oversee cryptocurrency markets, arguing that it shouldn’t be regulated by the SEC or CFTC, but instead a single designated entity.
Other exchanges also earned their influence due to SEC-related news: the regulator investigated the relationship between the US branch of cryptocurrency exchange Binance and two trading firms that have ties to Binance CEO Changpeng Zhao, as reported by The Wall Street Journal. The two firms, Merit Peak Ltd. and Sigma Chain AG, serve as market makers that continually buy and sell crypto on Binance, helping to lower price volatility.
Tesla was prominent in the Market adoption topic, as it announced in January it will accept dogecoin as payment for merchandise on a test basis, sending the meme-based cryptocurrency up 24%. “Tesla will make some merch buyable with Doge & see how it goes,” Musk said in a tweet. Last year, Bitcoin prices jumped after Tesla said it had invested in the currency and would allow customers to buy cars with it. But the company later scrapped that idea.
Meanwhile, a group of U.S. lawmakers said Facebook cannot be trusted to manage cryptocurrency and urged the social media platform to discontinue immediately a small pilot of its cryptocurrency wallet named Novi. The senators wrote in a letter to Mark Zuckerberg that the social media giant is once again pursuing digital currency plans on an aggressive timeline and has already launched a pilot for a payments infrastructure network, even though these plans are incompatible with the actual financial regulatory landscape. Many commentators took that to mean that Mark Zuckerberg’s ambitions for a Facebook cryptocurrency are officially over.
Big banks have been building up their ranks of crypto experts – and offering huge salary bumps to bring on new talent, as first reported by Bloomberg. GoldmanSachs, Fidelity, JPMorgan Chase, and Wells Fargo have added 1,000 crypto-related jobs in the past three years, with Goldman Sachs hiring the largest number.
The slew of hires is somewhat at odds with bank executives’ public statements about crypto. JPMorgan Chase CEO Jamie Dimon, for example, recently called bitcoin worthless, while Morgan Stanley CEO James Gorman has said crypto wasn’t a big part of the bank’s business.
But Goldman seemed to be all in now when it comes to Bitcoin and claimed the cryptocurrency had a 20% share of the “store of value” market. This means the asset, Bitcoin, can maintain its worth over time without depreciating, in comparison to precious metals or some currencies. Some journalists suggested that Goldman Sachs’ cosign of Bitcoin as digital gold could increase confidence in other major financial institutions to do the same.
Among the fintechs in the debate, Ripple gained media attention with the launch of a product called Liquidity Hub that allows financial services firms to offer their customers access to cryptocurrencies. The firm was in hot water with the U.S. Securities and Exchange Commission over XRP, a cryptocurrency with which it is closely associated.
Microstrategy, the largest corporate holder of Bitcoin, sold off a part of the company to buy up another 5,500 of the cryptocurrency. As one of the few publicly traded companies that have tied its value so close to the volatile digital currency, MicroStrategy stock is often affected by Bitcoin’s volatility. Other companies, including PepsiCo, say there’s no way they would park cash in Bitcoin, pointing to the risk and potential other uses for the money.
Goldman Sachs-backed crypto payments group Circle aimed to become a full-reserve national digital bank. CEO Jeremy Allaire said that since its inception, the aim of Circle was to eventually build a global digital currency bank, regulated in the same way as traditional commercial banks and held to the same standards, but with free and “frictionless” transaction and payment mechanisms.
Govt reps and corp execs
The most influential spokespeople in the debate included a good mix of government representatives and company executives.
The news around El Salvador‘s move to accept bitcoin as legal tender made President Nayib Bukele the most influential spokesperson in the conversation. Bukele, who has pushed for adopting the cryptocurrency, said it will help Salvadorans save about $400 million the government calculates is spent annually on commissions for remittances, while giving access to financial services to the unbanked.
SEC chairman Gary Gensler came second as he has been outspoken in his push to create a regulatory framework for the cryptocurrency space. Gensler told Congress that he wanted crypto exchanges to be registered with the SEC, adding: “Right now [investors] don’t have the benefit of that basic bargain that we protect people against fraud and manipulation . . . People are going to get hurt.”
The most influential exec was Changpeng Zhao, CEO of Binance, who vowed to ramp up compliance, while financial watchdogs question the rigour of its policies to prevent money laundering and the financing of terrorism on its platform. Zhao added the company needs to centralise its operations to work better with regulators as it tries to win licensing approvals around the world.
Of course, there’s no crypto discussion without Elon Musk – he said he thinks US authorities should stand away from regulating cryptocurrencies, as their intervention could hold back growth. “It is not possible to, I think, destroy crypto, but it is possible for governments to slow down its advancement”. New York Times columnist Kara Swisher asked Musk what the US government should do about regulating the industry. “I would say, do nothing,” he said, adding, “Just let it fly.”
Some of the cryptocurrency industry’s biggest names, including FTX CEO Sam Bankman-Fried, Circle CEO Jeremy Allaire, Bitfury CEO Brian Brooks, Paxos CEO Chad Cascarilla, and Stellar CEO Denelle Dixon were quoted in reports about their meeting with US lawmakers in December 2021, as Congress sought to ramp up its regulatory oversight over the rapidly growing space.
For example, Bankman-Fried, who co-founded the FTX crypto exchange, singled out crypto scammers, saying they made lawmakers want to stamp down on the industry.
The most influential banking exec was JPMorgan CEO Jamie Dimon, who warned investors about buying crypto assets as recently as May 2021, saying they were inferior to traditional assets. He has previously said he thinks bitcoin is dangerous and fraudulent. But the CEO of JPMorgan’s asset and wealth management business, Mary Callahan Erdoes, told Bloomberg in June that its clients were keen on crypto and saw bitcoin as an asset class.
How can PR and comms lead the way in crypto?
The world of crypto PR is an emerging industry of specialist PR firms that are responsible for a large proportion of the crypto news out there. Based on our analysis, here are a few ways companies can rely on PR and comms to establish themselves:
- Make PR as high a priority as innovation. Our recent analysis of the metaverse debate showed that Facebook’s attempt to control the metaverse narrative via its corporate rebranding is a clear sign that in the crowded tech industry, PR and comms are just as important as innovation. Many brands have tried to become synonymous with certain concepts but Facebook took it one step further and became literally eponymous with the metaverse by changing its corporate brand to Meta. In this way, early adopters of the concept can seem like followers. Some crypto and blockchain companies have already realised the enormous role of comms, snapping up high-profile public relations execs to head off emerging crises, influence media coverage, and capitalise on increasing investor and consumer interest. For example, Patrick Hillmann, a well-known crisis wrangler, left Edelman to lead communications at Binance, the world’s largest crypto exchange. And Former Googler Rachael Horwitz joined tech investment firm Andreessen Horowitz to lead its crypto communications.
- Proactively form your own policy platform and communicate with regulators. Take another lesson from the troubled social media industry. Avoid the mistake that social media companies made by not communicating directly with Washington, DC. For years, US politicians have mulled over whether and how should these platforms be regulated. Social media companies, and especially Facebook, seem to be waiting for the government’s decisions instead of actively participating in the debate around the regulation of their own industry. And Facebook and Twitter’s unprecedented bans of President Trump suggested that a new era of social media regulation (enforced both externally and internally) may be close at hand. Crypto companies shouldn’t wait for something like this to happen – they should be active stakeholders in the conversation from early on, not least because regulation news tend to make headlines when it comes to crypto, as we found in our analysis. Some have already started – for example, Horwitz helped Andreessen land a front-page story in The New York Times laying out its position on how crypto should be regulated.
- Become a sustainability thought leader. As our analysis showed, Sustainability is an emerging topic in the crypto debate – however, we found that while companies have already started engaging with regulation more proactively, not many aimed to be thought leaders within the Sustainability topic. The environmental impact of cryptocurrency is already well-documented, with studies showing that the amount of electricity being used to mine Bitcoin alone is greater than that consumed by entire countries. A recent poll showed that by 45% to 18%, Britons say they would support banning cryptocurrencies like Bitcoin in order to help tackle climate change, including 29% who would “strongly support” it. Addressing environmental issues would be especially beneficial when luring young investors, who tend to be very interested in ESG issues.
- Double down on differentiation. Crypto companies can’t avoid having to differentiate themselves in a crowded field. In the technology industry, competitive differentiation is one of the most difficult tasks. Successful product differentiation involves communicating the unique qualities of a product or company while highlighting the distinct differences between that product and its competitors. Doing this early is essential as new technologies are still mostly a marketing hype designed to show that a company is on the cutting edge and has future technology in mind. Blockchain company Alchemy, for example, has started calling itself the “AWS of blockchain,” suggesting it can help businesses develop tools on any blockchain tech they want. Alchemy wants to highlight its potential to become a ubiquitous tech provider in blockchain.
- Invest in community management. Community management isn’t quite PR in a traditional sense, but it is an integral part of communications strategy in crypto. Crypto companies should also be leaning on PR pros to explain and promote their products and services — often by interacting with young people on platforms like Reddit, Telegram, and Discord. They should be also advertising on platforms like YouTube, Twitter, and TikTok to convince everyday people to invest. For example, Golem network hired a PR agency called Paragon to run influencer marketing and digital ad campaigns to promote an app called Thorg. Marketers can tap into crypto communities as external innovation labs, creating real-time feedback loops around how products and services can be improved.