Banks, large investors, and exchanges are preparing for mass-scale crypto adoption.
Given the extraordinary growth we’ve seen over the last 18 months, it’s sometimes hard to remember that the crypto investment sector is still in its infancy. Consider this: In January 2017, the total market cap for the entire cryptocurrency space was just under $15 billion. By January 2018 the total value of the crypto market had grown to $795 billion. That’s an astounding 5,200-percent increase in just 12 months.
As staggering as those numbers are, the truth is that the market was very immature at its high in January. The infrastructure simply wasn’t in place to accommodate retail investors who were interested in doing more than simply buying Bitcoin or Ethereum.
Those who wished to buy high-profile altcoins such as Ripple, Stellar and IOTA had to register with multiple exchanges — and these exchanges suffered tremendous growing pains as they struggled to scale under heavy buying pressure. Registration delays and rejections were frequent and customer service was lacking.
More importantly, institutional investors had no reliable on-ramp into the crypto asset space. The highly-regulated nature of the finance industry has slowed development and subsequently, the creation of the infrastructure necessary to accommodate institutional buyers.
However, recent events show a shift is rapidly occurring, and financial institutions are becoming more and more equipped to service crypto investors — retail and institutional alike. Bitcoin and Ethereum futures have launched, giving large investors their first exposure to the market. Goldman Sachs, JP Morgan and other high-level banks and advisors announced plans to enter the market, with one-in-five announcing plans to begin cryptocurrency trading by the end of 2018. Goldman is already in the process of creating a crypto-focused trading desk. Hedge funds, too, are preparing to enter the market in force.
Today, the entire financial ecosystem is turning its focus to crypto. The infrastructure needed to support traders is slowly growing stronger. Existing exchanges are in the process of scaling and adding new features. More large players, such as Nasdaq are considering entering the field. Cryptocurrency coverage also continues to spread into more conventional media and entertainment spaces as more investors enter the market in need of quality news.
As we draw closer to widespread adoption and mainstream acceptance of cryptocurrencies, advertisers and media companies will certainly want their piece of the pie.
Why Looming Adoption Will Create Millions in Ad Revenue for Publishers
The US Financial Services Industry spends over $8 billion a year on digital advertising alone. Turn on the television any given day and odds are you’ll see a commercial advertising a financial advisor or online brokerage. The crypto asset market will most likely be no different. The industry offers a huge opportunity for media companies and a unique potential for exponential growth that hasn’t been seen in decades.
Facebook recently reversed its ban on crypto ads — a decision that sheds a light on the advertising and media opportunities that crypto presents. It would hardly be surprising to see other media companies such as Google and Twitter follow Facebook’s lead by striking a middle ground, banning ICOs (which have come under increasing SEC scrutiny) but allowing most other forms of crypto ads.
With widespread adoption looming — and the potential payoff for publishers so great — it’s likely we’ll see much more cryptocurrency advertising in the coming months and years, even if standards are tightened.
Facebook’s decision to reverse course on crypto ads is just one more indicator that enterprises associated with crypto (directly or indirectly) are preparing for the next wave of adoption. There’s simply too much opportunity — and too much institutional and enterprise interest to ignore.
That’s a very bullish sign for crypto asset investors.
Originally published by Steve Capone at https://www.investvoyager.com on July 13, 2018.