Explainer: What marketers need to know about cryptocurrency
To the uninitiated, cryptocurrencies can raise thoughts of unbelievable volatility and a currency type that offers safe harbor to the kind of people who would otherwise reject oversight of their financial dealings.
Those ideas are quickly fading away however as cryptocurrencies and their various offshoot concepts work their way into the mainstream. Stereotypes are being replaced by communities of investors who got in early on one of the most significant changes to the world’s financial system yet seen.
And for marketers who take the time to look a little deeper, they will find an audience of technologically savvy, cashed up investors who defy many of the norms and behaviors of traditional demographic groups.
The value of crypto
Cryptocurrencies are virtual currencies that use blockchain technology to keep an immutable ledger of ownership. Most are not issued by a central authority, although that is changing as central banks come to see their value for cross border transactions and other use cases. While Bitcoin’s wild valuations have tended to see that currency gain most of the attention, it represents only the tip of the iceberg in terms of available cryptocurrencies are and what they can do.
The Bank of America estimates the global aggregate market value of the digital asset ecosystem to be approximately US$2.1 trillion, with about 221 million people globally as of June 2021 having traded a cryptocurrency or used a blockchain-based application. It’s a massive rise from the 66 million users estimated at the end of May 2020.