Bitcoin has a branding problem. The market largely views bitcoin as a speculative asset with little to no use cases beyond transacting pseudonymously on the dark web to purchase illicit activities and fund terrorism. While the market may currently view bitcoin negatively that is not to say that bitcoin’s brand cannot change. Incumbents operating in the bitcoin ecosystem can help steer the direction of bitcoin’s brand and reinstate a positive market perspective of bitcoin, thereby recasting bitcoin’s brand for the better.
This article does not constitute legal or any other professional advice and is not intended to be relied upon as such.
Bitcoin’s brand needs surgery
Bitcoin has a branding problem. The market largely views bitcoin as a speculative asset with little to no use cases beyond transacting pseudonymously on the dark web to purchase illicit activities and fund terrorism. Mainstream media, regulators, and most institutional investors perceive bitcoin in a negative light. Unfortunately for bitcoin, it’s their negative perceptions that construct bitcoin’s brand.
That’s not good news for bitcoin evangelists who have an overarching goal of massive adoption to save the public from the perils and evils of inflationary fiat currency. If the market thinks bitcoin is nothing but a sketchy asset fraught with risks and illegality, they have little incentive to use or engage with bitcoin. Said differently, bitcoin’s ill perceived brand kills adoption.
While the market may currently view bitcoin negatively that is not to say that bitcoin’s brand cannot change. Although bitcoin does not have a centralised marketing team, incumbents operating in the bitcoin ecosystem can help steer the direction of bitcoin’s brand. And with that, they can potentially reinstate a positive market perspective of bitcoin and thereby recast bitcoin’s brand for the better.
Bitcoin’s brand is what the public perceives bitcoin to be
Jeff Bezos, the CEO of Amazon, described a person’s brand as what others say about that person when they aren’t in the room. In other words, one’s brand may be described as what comes to mind when you think about a specific person or company. It’s their impressions and experiences with the person or company that makes up a brand. Accordingly, it’s the market as an accumulation of each person’s perception of a person or company that defines a brand.
That doesn’t mean that the person or company is entirely absent in this process. As we all know, people and companies spend millions of dollars a year on marketing campaigns to control or guide the public’s perception of their brand. The problem, however, is that a company can only steer their brand they cannot define it. Rather, it’s the market that performs that function. So while one can spend countless hours and money on transforming their brand, at the end of the day, the market will always define brand.
Now obviously bitcoin is not a person or a company. Nonetheless, it does have a brand. When you ask someone what they think about bitcoin their response to that question defines what bitcoin’s brand means to them. Their answer is important because it contributes to the market’s perception of bitcoin.
If they have a negative view and communicate it to the public, that view helps shape other’s views about bitcoin. It also works the other way around. A positive experience with bitcoin may spur optimistic thoughts about bitcoin. The better bitcoin’s brand, the more chances others will see bitcoin in the same light, download a bitcoin wallet, buy bitcoin, and experience the first ever cryptocurrency to hit the market.
Bitcoin is a sketchy, money laundering, terrorist financing conduit
So now that we know that the market defines bitcoin’s brand and that bitcoin does in fact have a brand, what is the market saying about bitcoin? Well it’s not good. It’s actually very bad. So bad in fact that if a company had this bad of a branding problem it would likely be out of business. I’m talking about the constant media bombardment that bitcoin’s primary use case is for illicit activities. You know silk road and the like. Those websites that allow you to buy any product or service and even people, all priced in bitcoin. Not good! These headlines kill bitcoin’s brand.
Mainstream media is not the only one telling us that bitcoin’s brand is nefarious. World regulators have their own unique view of bitcoin and like most media outlets they paint bitcoin with a tainted lens. In almost every report from a regulator, they will discuss bitcoin within the context of money laundering, terrorist financing, and consumer protection. They view bitcoin as conduit to transform or disguise illicit gains, to send and finance terrorist activity, and as a speculative asset class that has little to no intrinsic value. They communicate bitcoin’s brand as a precarious medium of exchange that only seems to be used for illegal purposes.
Investors take a different approach when it comes to their perception of bitcoin and its brand. A recent study from Gallup states that the main reason investors have not piled into bitcoin is because they view it as unsafe. They see the headlines about exchanges going insolvent, getting hacked, or more strangely their founders dying. These headlines do not exactly make a great case for a safe asset to get involved with. It more realistically deters them from investing in the first place.
On top of worrying about the wild volatility in bitcoin markets now they have to worry about safe key practices, whether their exchange will get hacked, or whether the operators of the exchange will simply walk away with all their bitcoin. All these factors help create a bitcoin brand that doesn’t necessarily scream investment friendly.
As you can see, bitcoin’s brand has been painted with a negative brush. These headlines and stories stitch together a bad story about bitcoin. Like I said, if bitcoin was a company it would likely be insolvent, or at least barred from operating given all of bitcoin’s illicit connections. That is why bitcoin needs a serious re-branding effort, a point I discuss further in this post.
Your wrong. This doesn’t matter. Bitcoin only needs to go up.
Of course one can easily say that none of this branding stuff really matters. One may posit that: who cares about brand when the price of bitcoin is on the up and up? The only branding that bitcoin needs is that it appreciates in price, the rest is history.
The problem with that approach is that it has not translated into adoption. Sure we had a huge increase in price in the recent bull market. But guess what? That ended with a big burst that probably left a sour taste in many people’s mouths. If price is the only variable that people should care about when thinking about bitcoin, then why has that proposition failed to attract wide spread adoption? Why aren’t more people clamouring to bitcoin in anticipation of huge increases in price?
I’ll tell you why. It’s because to most rationale people it sounds like a snake oil salesman’s pitch. The proposition that an asset can only go up screams “it’s too good to be true”. People that got taken during the recent bubble now know better and the plethora of media attention on this incident will probably cause people to think twice about bitcoin. The narrative that bitcoin only needs to go up to attract a wider spread audience, is just that, a narrative. If you look at people’s actions they are investing in traditional capital market instruments, stocks and bonds, not bitcoin. This belief that price appreciation will push bitcoin to the next level needs to be couched back in reality. And that reality, ie the market, is saying that price appreciation alone as a brand is not sufficient to achieve mass adoption.
Pursuing a change in perception
Although bitcoin does not have the greatest brand, the bitcoin community can integrate strategies to change that. The three strategies that come to my mind are simple, but will hopefully go a long way to help change what the public thinks about bitcoin.
The first change that may help comes from communicating more positive news about the space. Just recently I saw an article about how an organisation is using bitcoin to help fund its efforts to save the rain forest. This article represents a stark contract to many articles that discuss bitcoin as a dark web medium of exchange. When people see bitcoin being used for altruistic causes it helps change their perceptions of bitcoin. Of course for there to be more positive bitcoin news such philanthropic interactions actually have to take place. This may pose a problem as such actions in the bitcoin realm arise infrequently.
These types of positive actions connect to my second suggestion: a better use case. Bitcoin needs a killer app. It needs something that will attract wide spread adoption that people will interact with and use. The whole “hodl” and savings vehicle use case that many posit has not done enough to change bitcoin’s brand nor its adoption. The hodl message may make obvious sense for those in the bitcoin community, but to many outside the community, it seems like a bunch of rubbish. It goes back to the snake oil salesman pitch dilemma I mentioned earlier.
Perhaps instead of focusing on how bitcoin fixes everything, the community needs to focus on innovation and development. Fixating on the second layer of bitcoin and the benefits that come with that may eventually bear fruit that will eventually translate into a use case beyond hodl and doom and gloom economics. Innovation may create a product that people can actually use and that solves a real world problem beyond having to rely on inflationary fiat currency as a scapegoat for bitcoin adoption. Having a killer app on the rails of bitcoin may help change the public’s perception of bitcoin away from its current perception as a dark web currency to that of an innovative financial product with real world benefits.
Lastly, the narrative around bitcoin’s use a illicit activity has to change. Now we have certainly witnessed a change in this narrative from some media outlets. More and more news is being produced about bitcoin as a safe haven asset class, growth currency, asymmetric asset, etc. This definitely shows a maturing market likened to the traditional capital markets. More news in this sphere will likely help steer bitcoin’s narrative and brand away from the negatives and more towards the positive and mature headlines. As more institutional investors slowly move into the space, we may witness a gradual shift in perception.
The trick now is for those bitcoin influencers to make that happen. Once the market starts to take bitcoin more seriously, mainstream media outside the crypto media outlets, will likely follow suit. This chain reaction will then reinstate a more mature and institutional approach to bitcoin’s brand.
The path is long, but hopefully achievable
The biggest challenge with brand management is the lack of control that one has over their brand. Like Jeff Bezos said, your brand is what people say when you aren’t in the room. You have no control over what they say. The same goes for bitcoin. It has a brand that is determined by the market.
Bitcoin’s lack of legal personality with no board of directors or marketing team exacerbates this problem. With no one directly pulling the strings behind the bitcoin project this makes it inherently difficult to steer its brand development. Unlike a company or person that can employ others to effect brand awareness in the market, bitcoin cannot avail of this option. Instead, bitcoin must purely rely on the efforts of all market incumbents who participate in the bitcoin ecosystem. Its brand development relies on the influencers, developers, exchanges, companies, fund managers, and other bitcoin affiliates.
It is they who must help reinstate bitcoin’s brand in the eyes of the market. They must help steer bitcoin into a better light and shed its past demons. Only then may the wider public, media, and regulators see bitcoin as something more than they currently view it: as a sketchy, money laundering, and terrorist financing conduit. With better use cases, more positive news, and more institutional attention, bitcoin may be able to shed those views and move into a new chapter of brand positivity. With that, we could witness a new wave of interest and adoption in bitcoin.