The Marketing Magic of Cryptocurrency

This week I'm writing about marketing – what makes for successful marketing? In my opinion, successful marketing is intrinsically tied to successful business because marketing is intrinsically tied to reputation. And essentially, a business is one that has a reputation for doing something worth paying for. In business, we often call this reputation a “brand”.

The first step of marketing is curating a message, the second step is sending the message and the final, and most critical step, is the message being received.

The first two steps are readily understood. The message of a business is an offering that is (eventually) worth exchanging money for. You build this message by having a portfolio, by showing people exactly what it is that you can do. This means examples, this means descriptions, this means demonstrations. On the second step, sending the message, we find our regular understanding of marketing: getting attention. Sending the message includes putting out flyers, putting out adverts, shouting about it from the rooftops – these are all aimed at drawing attention to your business reputation. However, the most critical component of marketing, is the art of engagement. Because as great as your reputation might be, and as many previous customers you may have pleased, and as much as you spend on putting that reputation in people’s faces – unless people decide to pay attention, unless they engage with your message then they don’t receive any marketing.

So, what does engagement mean? Engagement, essentially, is granting permission for further solicitation. We see many examples of engagement, but what I am referring to here is resonance, when people relate to the message the business is sending, and consider it consequential to their lives – they have received the message. Thus, as long as there is some emotional connection to a message, then the message has been successfully received.

In general, engagement of a message is the most difficult part of marketing. The quality of a product can be controlled by a business, as can the amount spent on adverts – but making the masses engage with a message is the magic of marketing. And this magic is caught spectacularly in cryptocurrency.

Firstly, cryptocurrency has a reputation for making people money. This is apparent in the mass of influencers and the social caricature of the young crypto rich. Secondly, this message is sent organically across social media, and these social media channels have been granted permission through follows and through entry into groups. Now, whilst the strength of the marketing message “cryptocurrency will make you money”, ebbs and flows, the receptivity of such a message seems to be constantly available. This is evidenced in the numerous crypto booms and busts that have occurred: people lose money in cryptocurrency and then a few years later return to engage in the same scandals. That is, despite failing to deliver on it's promise, the marketing message of cryptocurrency still has high receptivity. This is because the message of cryptocurrency has two distinct prongs, one of which is unaffected by crypto busts.

Most people who engage with crypto, do so on two levels; the first is making money (gambling), the second is economic philosophy. These two levels occur simultaneously. Whilst people are speculating, they are also accepting the message that digital decentralized money makes more sense than fiat, government controlled money. In ­The Alchemy of Finance, George Soros describes the two levels of reasoning that financial participants have: a “cognitive” reason and a “participatory” reason. In cryptocurrency, the cognitive reason is a philosophical one, regarding the tyranny of central banks, whilst the participatory reason is the excitement that comes with gambling. The magic of cryptocurrency marketing is that people fail to distinguish between cognitive and participating reasons, instead they conflate the two. Thus, whilst people engage with a participatory message of “get rich quick”, those same people ­receive a cognitive message vis-a-vi a digital monetary revolution.

Thus, the magic of cryptocurrency marketing is that people accept a philosophical message, but then engage in a monetary fashion. People who accept a philosophical position are loathe to relinquish it (trying to dislodge philosophical views often leads to further entrenchment), thus the message of cryptocurrency seems to be in a state of constant receptivity.