On Wednesday, March 14, Google announced that it would no longer run advertisements from cryptocurrency agencies on its massive and dominating search engine platform. As the largest online advertisement provider in the world, Google has unmatched authority and as such, is the go-to spot for companies looking to boost their visibility, build brand exposure and gain instant access to an overwhelming audience of interested users.
While Google’s news came as a surprise to some, there were signs pointing to it for months. In January 2018, Facebook took similar measures to oust cryptocurrency agencies from its sidebar advertisements as well. The ban, which is expected to go into full effect this June, had an immediate effect. The value of Bitcoin, arguably the most well-known and popular form of digital currency on the market, dropped to below $8,000 the day of the news release. That 9% drop is significant and undoubtedly left eager investors on edge, but it’s still less than the 12% that Bitcoin dropped back in January following the Facebook announcement.
The reason behind the greater dip two months ago can be attributed to the fact that Facebook cracked down not only on the cryptocurrency market, but also on binary options and initial coin offerings (ICOs) as well. In contrast, Google is primarily focused on placing stricter controls on the general cryptocurrency market.
The crux of the advertising switch-up seems to lie in the way cryptocurrency is promoted, especially to those without in-depth investing knowledge in the relatively new movement. From agencies offering get-rich-quick promotions to those teaching novices how to lower the cost of handling, trading, and storing the currency, there are pulls from every direction and interested web users need only click a button to become fully immersed in the platform and its promises.
Yet, experts within the industry aren’t adding up their losses quite yet. Some are pointing to the fact that blatant advertisements on giants like Facebook and Google can actually serve as red flags to the cryptocurrency industry, which operates widely behind a sheer veil of mystery and intrigue. The very concept of cryptocurrency itself is that to obtain its value, you have to crack a series of time-intensive and very difficult algorithms. As such, the industry didn’t need the very public promotional tactics deployed by the online giants. In fact, some experts claim the advertisements never had any real impact on cryptocurrency price.
Rather, these experts point to a growing fear of over-regulation that has values dropping at substantial rates. While China has banned Bitcoin since 2013, there are always speculations that it will crack down on other peer currencies relatively soon and as such, investors around the world are taking stock of what they have and many are relinquishing their shares in anticipation that another major ban will cut their value even further.
All of this discussion comes at a time when Washington is scrutinizing the cryptocurrency market more than ever before. On the same day as the Google announcement (Wednesday, March 14) a subcommittee within the House Financial Services held a hearing on cryptocurrencies and ICOs. The takeaway? It’s Congress’ job to protect investors, yet it cannot stand in the way of industry growth. Stronger and smarter regulatory measures seemed to be the main talking points of the hearing.
While those are still being worked out, it remains to be seen how long-term of an impact the dismissal from Google will leave. If history following the Facebook sage proves true, the market will bounce back. Yet, the greater threat may be the rising uncertainty of the general public coupled by a legislative focus on stricter regulations. The shroud of ambiguity is part of what makes the digital currency industry so intriguing, but only time will tell if it will be its downfall.
