The cryptocurrency industry has quickly risen in prominence, and until recently, was regarded by many as a new dawn in financial services. In 2022, MBLM added crypto to its Brand Intimacy Study, which looks at brands based on emotion. It entered the rankings at eighth out of 19 industries - placing higher than (traditional) financial services like credit cards and banks, which ranked 14th.

In the 2022 study, one in four users had an emotional connection to their crypto brand(s) and the category ranked high across several key archetypes, which are defined as patterns or markers that most identify the character and nature of intimate brands. These include enhancement (customers become better through use of the brand—smarter, more capable, and more connected), fulfillment (exceeding expectations, delivering superior service, quality and efficacy), and ritual (when a person ingrains a brand into his or her daily actions; it is more than just habitual behavior).

Keywords associated with the brands included “value,” “trustworthy,” (!) “gains,” “future,” and “skyrocketing.” With associations like these, it is easy to understand how and why so many brands in this space connected strongly with their audiences.

Different flavors

It is also notable how different in tone and tenor many of the brands are in this space from each other in terms of what they are communicating to consumers on their websites. Bitcoin is tech-focused, Cardano is more human, and Ethereum is a mix of both.

• “Bitcoin uses peer-to-peer technology to operate with no central authority or banks; managing transactions and the issuing of bitcoins is carried out collectively by the network.”
• “[Cardano is] a platform built for a sustainable future, to help people work better together, trust one another, and build global solutions to global problems.”
• “Ethereum is a technology that’s home to digital money, global payments, and applications… It’s open to everyone, wherever you are in the world –all you need is the internet.”

In recent months, we have seen a considerable backlash to the industry, and crypto has come under fire for a plethora of questionable activities. While many admired the new borderless frontier crypto initially represented, they now have growing concerns over its conduct and practices. This crystalized with the implosion of cryptocurrency exchange FTX, which in addition to fraudulent business practices also used celebrities and influencers like Tom Brady and Shaquille O’Neill to further enhance its image as a proven player.

Since then, there have been numerous other concerning issues coming to the surface. The US Federal Trade Commission is probing several crypto firms over allegations their advertisements were deceptive or misleading. Further, AFL’s crypto exchange partner, Crypto.com, has breached UK advertising standards on multiple occasions and has been accused of “misleading” and “irresponsible” behavior. A group of French crypto investors has filed a criminal complaint against Binance, accusing the world's biggest crypto exchange of misleading the public Recently projects involving CoinMarketCap airdrops have been alleged to have been manipulated to benefit a few investors and not distributed to thousands of wallets.

It is likely that many consumers were seduced by the tactics that crypto companies employed and the bold promises made. They were led to believe in the value of their decentralized models and excitement over the prospects offered. As the industry went through turmoil and crisis arose, consumers' viewpoints quickly plummeted. Brand Intimacy is built on positive emotional connection and trust, and brands that have betrayed consumers will likely see that their bonds have eroded.

Where to from here?

This leads to a question: in the long term, how will consumers react to these revelations and turbulence? Is the very freedom and lack of bureaucracy that consumers liked about crypto also what will turn them off?

Clearly some consumers, perhaps those slow to try new things, will likely put crypto even lower on their list, waiting for more rules and guardrails to be established. A recent survey found 60% of Americans consider crypto to be highly risky.

Trust will likely have eroded for some, and recent scandal may slow the adoption curve. Some recent tweets include:

• One special lesson I learned in crypto a long time ago now, and that’s don’t trust anyone.
• I want to invest in crypto, just waiting for the government to legalize it.
• #FTX US President: Family offices and pension funds are just waiting for regulatory clarity to invest in crypto.

Others, despite the setbacks, seem settled in for the long term.

• I don’t even worry about price right now because I’m confident in my long-term bags. I’m in crypto for the long haul… I’m not going anywhere.
• If web3 was easy, everyone would be doing it. But no need to worry; I’m in the #crypto game for the long haul!

It may be the recent scandals impact new users from trying crypto, so we may see a lower rate of what we call "sharing" - an early stage of brand intimacy that centers on when a person and brand engage and interact. For those already strongly committed to crypto, such as users in the "fusing" stage when a person and brand are inexorably linked and co-identified, time will tell if the brands have already established enough "halo" to weather recent storms.