This year promises to be not the easiest for the cryptocurrency market. Many countries have talked about the need for legal regulation of digital tokens, it is becoming increasingly difficult to launch ICO, and new coins do not always meet the imposed expectations. Now the queue is also a ban on advertising cryptocurrency on the Internet. Which sites have already banned it, and which are just going to do it? How did the market react to this and what should we expect next? We will describe in this article!
This winter, an official Facebook blog post appeared to ban advertising “dubious financial products.” Pyramids like MMM, binary options, as well as ICO, cryptocurrency and services for buying and exchanging digital tokens fell into this category.
Many users did not believe that the ban would come into force, but already on January 31, new rules prohibiting the promotion of cryptocurrency and related projects were launched on Facebook.
Recently, similar plans were announced on Twitter. The company announced its intention to ban advertising cryptocurrency, ICO, cryptocurrency wallets, exchangers and exchanges, and the new policy will be implemented within the next 30 days
In March last year, the Russian company “Yandex” decided to get rid of excessive advertising of cryptocurrency. Advertisements did not disappear completely, but their number decreased by 80%.
This March it became known that a ban on advertising is going to be introduced by Google. The relevant rules are already spelled out in the new statute of the company Alphabet, which owns search engine number 1. However, the ban will take effect only in June of this year.
After Facebook announced a ban on cryptocurrency advertising, Western media have been waiting for a response from Google for several months. After all, the largest search engine gives scammers a lot more opportunities than a social network.
And Google finally reacted. The company said that over the past year it has removed about 3 billion malicious advertisements and blocked millions of fake accounts. A significant part of them was associated with cryptocurrencies, so the time has come to ban such advertising.
Google and Facebook claim that a ban on advertising is needed to protect users and sanitize the information field, the quality of which now leaves much to be desired.
Indeed, according to experts, cryptocurrency-related advertisements have recently become too many. Most of them are associated with ICO, as well as services for the purchase, exchange and storage of cryptocurrency. It is on these ads most often gullible investors are conducted, and it is there that fraudsters are waiting for them.
When it became known that Facebook was going to ban cryptocurrency ads, the Bitcoin rate dropped sharply below 8 thousand dollars. It exceeded 11 thousand before.
Later, the price of BTC stabilized, but if we study the dynamics of the market value of cryptocurrency, it is clear that the next sharp drop fell on January 31. That is the day when the ban on Facebook came into force. And, as we know, until the January maximum Bitcoin so far can not rise.
Other cryptocurrencies also reacted to the ban by lowering the price. Ether lost about 4% of its market value, Litecoin – 3%, other popular altcoins – from 2% to 7%.
In addition, the total capitalization of the cryptocurrency market fell to $ 350 billion (a month before the ban, the figure exceeded $ 800 billion). Of course, the reason for such a sharp collapse was not only a ban on advertising, but this factor must also be taken into account.
Nevertheless, many experts believe that, although Facebook and Google-level corporations can really push the market, the collapse will not be long-term. Some experts are even sure that the ban on advertising will be able to improve the market.
For example, Craig Cole, director of CryptoMaps, believes that such a ban will have a negative impact on the market in the short term, but will show its useful side in the future.
According to him, it is fraudulent projects that, because of problems with promotion, will be eliminated from penalties, even before they become known to a wide audience, will suffer from penalties.
After all, top cryptocurrencies, as well as top exchanges, exchangers and other online platforms, no longer need active advertising. According to Cole, they will survive a short-term drop in market indicators, but when the market situation stabilizes, they will quickly catch up.
But fraudsters in the new conditions to get into the market will become much more difficult. After all, they will take away the main tool – viral advertising in search engines and social networks.
For example, Shidag Guran from GlobalBlockChain is sure that at first the number of scammers will really decrease, but soon they will find new opportunities to enter the market.
Moreover, he sees a huge minus in the fact that both fraudulent and bona fide projects will meet resistance. After all, advertising will be banned for all.
Despite some contradictions between experts, most of them agree that the top five cryptocurrencies will not suffer much from the ban. Or lose the price for a while, and then go up again.
But the lesser-known Altcoins may sharply lose their positions and lose the support of ordinary investors, who will hasten to withdraw their capital from them.
In this case, only top coins and little-known altcoins will remain on the market. Accordingly, the difference in market capitalization and price between them will be simply huge.
Several hundred cryptocurrency startups have already been planned for this year, but now many of them are at risk of failing even at the stage of advancement and pre-day.
If earlier they could search for investors through Facebook and Google, now they will be deprived of a huge part of the traffic. By the way, together these sites control about 60% of the global Internet advertising market.
Many experts believe that startups are not ready to lose an audience and will look for ways to circumvent the ban. For example, it is known that restrictions come into effect if the system “detects” a prohibited keyword (“Bitcoin”, “ICO”, “cryptocurrency”, etc.). In this case, it is enough just not to use these words or, as some users suggest, to write them incorrectly.
Even if someone succeeds in circumventing the ban, the market will lose many potential investors due to difficulties in conducting an ICO and promoting new cryptocurrencies.
Analysts say that a strong breakthrough in the cryptocurrency market in 2018 cannot be expected. The chances of active development are only popular projects, which are already known to investors. However, due to a decrease in advertising traffic, the audience coverage (and, hence, capitalization) will decrease among them.
If we throw away the pessimistic scenario, according to which the market will develop slowly, and even good projects will not be able to get through to their user, there remains one more option. Developers will continue to attract new investors, but through other channels.
Many experts assume that the websites of intermediaries will be in great demand – a kind of traffic transfer points between the promoted web pages and advertising sites. Now a similar scheme is used in Yandex. The search engine imposed a ban on advertising of medicine, so companies offering such services promote themselves through third-party sites.
In addition, the need for SEO (site optimization for search queries) may noticeably increase. That is, developers will be able to continue to promote their projects in the network, just for this you will need to work well on the text, adjusting it to the new rules.
For example, Microsoft’s Bing search engine could be an alternative to Google. As is known, the Bill Gates company supports many cryptocurrency projects, so it will certainly be interested in their promotion.
As for advertising in RuNet, Facebook can be replaced by social networks VKontakte and Odnoklassniki. In addition, there are messengers like Vibera and Telegram, which are already actively used for advertising.
And finally, we should not forget about thematic forums like bitcointalk.org. Many experts expect that after the introduction of the ban on Google, most of the advertising of cryptocurrency projects will move there.
It is likely that the ban on advertising cryptocurrency is not an initiative of the online sites themselves. After all, for them it is associated with loss of profit. For example, after a mass sweep of advertisements, Google has already lost about 20% of advertising revenue.
Indirectly, this hypothesis was confirmed in Facebook and Google. Companies stated that legal entities operating within the legal framework will be able to circumvent the ban. In countries where laws regulating a cryptocurrency market have already been passed, for this you need to obtain permission from the state financial regulator.
First of all, you should not take part in obscure ICO and risky operations with cryptocurrency. There is no guarantee that new projects will be able to shoot under conditions where they will have no place to advertise.
However, this does not mean that you need to merge all your assets, except cryptocurrency from the top five. Indeed, in a general panic, many traders will sell their coins, thereby lowering their price. That is, you risk to sell your assets for nothing.