How Cryptocurrency Will Affect Digital Marketing

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Stock Markets Show More Signs of Cooling: How Will This Affect Digital Assets

In 2020, the cryptocurrency markets will be faced with another factor – falling stock prices. In October, the upward trend of the S&P 500 was broken by the poor stock performance in the FAANG group of tech companies. But worldwide, stock exchange indexes are showing signs of slowing down, as well as potentially moving downward, after a spectacular decade of hot money and gains.

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How will blockchain affect digital marketing?

Cryptocurrency and blockchain have become the hottest topics in the last few years, but most people still use these terms interchangeably. If you want to know how they influence the world around us, you need to distinguish between the two concepts first.

A blockchain is a distributed ledger technology that forms a chain of information-rich blocks. Each block is validated and permanently recorded, forming a never-ending transaction record. On the other hand, cryptocurrencies represent a tool or resource on a blockchain network in charge of financial transactions such as buying, selling, investing, or trading.

Knowing that cryptocurrency is the future of money, many companies and even countries are preparing to launch their own version of digital currency . Facebook is already working on this project, while countries like Palestine, Ecuador, Iceland, and Singapore have also chosen to create their own cryptocurrencies rather soon.

However, Bitcoin and other virtual coins are not affecting the marketing industry so radically. On the contrary, it is blockchain that makes the biggest impact in this field. This article will show you how blockchain is going to influence digital marketing.

4 ways blockchain is changing marketing

Now that you’ve seen the basic mechanism behind cryptocurrency and blockchain, it is time to find out more about the ways this technology is changing marketing. There is the whole bunch of effects and possible outcomes, but we will show you 4 most important impacts. Let’s check them out:

More transparent transactions

According to the report, the number one quality people demand of big brands is to be honest about their products and services. This is why digital marketers focus mostly on confidence and trust building. It is also the reason why influencer marketing is so popular these days.

You might wonder now – what does blockchain have to do with consumer trust? Well, this technology provides users with a complete ledger of history related to any given item. In such circumstances, it is getting easier to ensure the transparency of products and transactions.

Here is a good example: You want to purchase a premium necklace, but you are not sure whether it’s fake or not. Using blockchain, you can go down the ledger and determine the authenticity. It’s as simple as that!

Elimination of ad fraud

A Forrester study revealed that almost 60% of all display ad dollars were lost to fraudulent or unviewable inventory in 2020. This is one of the biggest pain points of digital marketing as it’s getting harder to confirm that the media bought is the media delivered.

This is where blockchain steps in to improve the transparency and eliminate ad fraud. The system can analyse and validate each step of a consumer journey, thus proving that the targeted customer really saw your ads.

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It’s a brand new solution that ensures advertising quality and makes it easier for a marketer to calculate return on investments (ROI). At the same time, it prevents ad bots and spamming by promoting engagement trackers to confirm the overall credibility of your marketing campaigns.

Unique customer identification

Although widely recognised for its commercial use, blockchain technology can also serve some other purposes such as customer identification. Using a combination of decentralised technology and ID verification, marketers can now design well-protected customer profiles.

This sort of methodology improves consumer privacy and enables users to control their digital identities. For instance, BlockVerify is a blockchain-based anti-counterfeit solution that already delivers superb results in the pharmaceutical and electronics industry.

Inaccessible customer data

As you probably know already, anonymity and decentralization are the most popular features of the blockchain technology. With the new system, it is impossible to use cookies and accumulate consumer-related data from multiple online sources.

As a consequence, it will be impossible to build a buyer persona and serve advertisements the way we do it today. But how can marketers search and find valuable information? The answer is simple – they will ask customers directly.

All you need to do is ask – or even pay – a consumer for his or her personal information, and you can find it all in one place upon receiving permission. This place is called the blockchain. Such a practice could cost marketers a lot, but they will at least acquire highly relevant data and provide prospects with tailored offers.

This means you won’t be bothering potential customers with irrelevant content, while you can also expect to increase ROI drastically.

Conclusion

With its data encoding promotion, blockchain has become a genuine marketing challenge. The system makes it difficult to access customer’s personal data, which has traditionally been an anchor of digital marketing. However, blockchain still provides numerous possibilities for better and faster transactions.

In this post, we showed you how the new technology is going to favour companies and marketers who are able to prove their value to the target customers. Blockchain technology is still on the rise, so don’t be afraid of posting comments and letting us know if you need more explanations about this interesting topic!

Bryan is a cat lover, entrepreneur, and amateur programmer. He is a marketing specialist at AU BestEssays, too. He believes we can all make a difference by being nicer to each other. His personal credo is “Do not let anyone tell you coffee isn’t a necessity.”

How Today’s Stock Markets Crash Will Affect Cryptocurrency Markets

Over the past few days, and particularly over the past 24 hours news on Wall Street has gone from hyper-optimistic to downright depressing. One article declared we’d come to “The end of the market’s Trump honeymoon”, others are analyzing not whether or not major correction…

Images like this infamous one from the 2008 financial crisis have started to appear in bearish articles.

Over the past few days, and particularly over the past 24 hours news on Wall Street has gone from hyper-optimistic to downright depressing. One article declared we’d come to “The end of the market’s Trump honeymoon”, others are analyzing not whether or not major correction is underway, but whether or not the correction will lead to a “multiyear bear market”. The change in sentiment is startling, and it’s been almost perfectly mimicked by the crypto market. Watching this play out has caused two questions to arise: firstly how strong the correlation between traditional financial markets and the cryptocurrency markets is and secondly if the correlation exists what the implications of today could be for cryptocurrencies.

The Correlation Question:

Disclaimer: This part of the article gets a little technical.The tl;dr here is while the correlation between the markets themselves is weak, there’s a noteworthy correlation between the sentiments of the two markets. I explain the implications of that correlation in the section following this one.

While many, many attempts have been made to qualitatively correlate crypto markets and even imply causation (a big no-no in quantitative analysis, relatively few attempts have been made to quantify the relationship. Aside from a few outdated articles, I’ve found little. The best resource I was able to find on the subject was Sifr Data, a free cryptocurrency data visualization tool. Among other visualizations, they have a cryptocurrency correlation matrix which shows the z-scores and p-scores of correlations between various assets.

For those of you who skipped statistics class as much as I did, the numbers in the first chart are called z-scores. They represent the direction and strength of the relationship between the two sets of data. A higher absolute z-score means greater correlation, while a lower absolute z-score means less of a correlation. Whether the number is positive or negative indicates whether the relationship is direct or inverse:

The S&P 500, because of it’s z-score, has a “weak positive relationship” to Bitcoin. This is hardly interesting and according to our matrix is not statistically significant (check out the link for an explanation of why). Now let’s look at the VIX z-score, the other number I mentioned above. It’s a -0.31 making it a “moderate negative relationship”. For those unaware VIX is an index of the volatility in the stock market and is also referred to as the “fear-gauge”. This means that there is a definite inverse correlation between VIX and Bitcoin. This was demonstrated quite well in an article earlier this year which contained the following graph:

This is an extremely interesting find. If true, it means that as fear in markets decreases bitcoins price increase. Conversely, as fear increases bitcoins prices decrease. This makes Bitcoin a risk-on investment as opposed to more conservative investments like gold which are considered risk-off investments.

It also tells us that in a longer-term bear stock market cryptocurrencies will likely fare even more poorly than their stock counterparts. Conversely, in a bullish market, they will likely fair better.

The Correlation Plays Itself Out

With this correlation in mind, let’s analyze the recent market trends which have caused this rise in the VIX (up 115% today) and try to figure out what’s going on here. Today, the Dow Jones dropped 1,175 points constituting the single largest point drop in the measures 130+ year history. Nonetheless, because of the recent meteoric rise, percentage wise it only constituted a 4.6% drop. To give a measure of what this means for the markets, we can simply say that the Dow Jones has reversed all gains made in 2020. This alone, while bearish, is definitely still consequential. Unfortunately, the Dow Jones wasn’t the only index hurting today with the DAX (based in Germany), FTSE (based in the UK), and S&P (based in the US) all down sharply over the past few days. Looking at this combined with cryptos own 45% fall in recent weeks, you can see why the VIX is climbing and fear is driving the market.

What’s causing all this? Everyone has a theory, but there have been two rather nerve-racking causes. First of all the Federal Reserve’s 10-year yield rate, which determines the interest rates the U.S. government and Americans pay on their debt has increased recently. Higher interest rates can lead to decreased consumer spending and can increase inflation, both rather bearish signals. This combined with some rather prominent economists/former Fed Chairman (I’m looking at you, Greenspan) declaring that we’re entering a “massive multiyear bear market” have driven VIX through the roof. In the world of crypto, this fear mongering is combined with the recent price fall, crypto’s notoriously panicky retail investors, and general FUD and you end up with what could become a long bear market.

I hope I’m wrong, and maybe I am. Hope is probably the best I can do. As we now know: market sentiment, more than anything else, drives the price of cryptocurrencies. I anticipate an interesting few weeks ahead of us.

Disclaimer: The views expressed in the article are solely that of the author and do not represent those of, nor should they be attributed to CCN.

Featured image from Shutterstock.

Last modified: January 24, 2020 11:16 PM UTC

Jake Sylvestre is the founder of PhishTrain, a board member on Projectile X (which manages YBC) & a cybersecurity expert who consults for Fortune 500 companies on topics like cybersecurity, blockchain, and marketing. Follow me on Twitter: @jakesyl Jake Sylvestre is also the host of The CCN Podcast

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