Every four years, an event occurs in the Bitcoin ecosystem that sets off a chain reaction. As predictable as an astronomical phenomenon, the Bitcoin halving has consistently fueled excitement through parabolic price rises and exponential increases in global visibility that bring waves of new adopters.
For those of you unfamiliar with the concept, Bitcoin halving is a hard-coded economic policy that slashes mining rewards in half, constricting new supply as demand grows. With today’s maturing market, plethora of on-ramps, and expanding user-base, many people believe the next halving event will set the stage for the beginning of a new bull run.
In fact, 84% of investors believe that Bitcoin will blast beyond 2021’s all-time high when mining block subsidies decrease from 6.25 to 3.125 bitcoins this year. It seems that the question for crypto companies isn’t if, but when – and then how best to harness the impending global interest.
Is it time to bring out the big guns and hire a crypto PR agency to develop a marketing strategy aligned with emerging trends? Or is it time to take a more introspective look at your platform’s user experience and accessibility for the next wave of adopters?
Bitcoin Halving Rewards Feedback Loop
Image Source: Gemini.com
When Bitcoin first launched in 2009, each block came with a 50 BTC reward for miners. The first halving occurred on November 28th, 2012 which sliced rewards to 25 BTC per block. Leading into the event, Bitcoin traded for only $13. Yet the following year, Bitcoin peaked at a towering price of $1,152 – demonstrating a nearly 9,000% rise after the subsidy contraction.
The second halving landed on July 9th, 2016, decreasing rewards by half again to 12.5 BTC as Bitcoin traded for $664. This time, Bitcoin embarked on an even more dizzying bull run the following year, skyrocketing to $17,760 just 12 months later.
Most recently, on May 11th 2020 subsidies contracted downwards once more to 6.25 BTC with Bitcoin exchanging hands for $9,734. Mirroring the exponential reaction of the previous events, Bitcoin shot upwards to a record high of $67,549 by spring of 2021.
These consistent knee-jerk bull markets in response to predictable supply shocks point to a clear relationship between the Bitcoin halving mechanism and price. The increasing mainstream spotlight and hype fuels mass new user sign-ups from investors looking to capitalize on the gains.
Crypto Revenue Models That Benefit From Halving Events
Halving events in crypto create ripe opportunities for companies to capture new adopters and monetize the wave of growth that follows. As more users flood into Bitcoin and other cryptocurrencies during these cycles, many different services benefit from scaling revenues through onboarding new clients.
Exchanges, for example, facilitate easy market access for new users while charging small fees on trading volume, which typically grow into the billions when new adopters create supply and demand. Wallets and custody providers earn through account and transaction fees, as people need their help to securely store and transfer assets.
Lending protocols and Decentralized Finance (DeFi) entice depositors by offering attractive Annual Percentage Yields (APYs). These rewards are funded by interest from loans and platform fees. Brokerage services also earn deal flow from new investors wanting to buy and trade tokens.
As more participants enter the space due to the halving, companies that can onboard even a fraction of this user growth can scale revenues dramatically. As such, preparing to meet this demand surge is crucial to monetizing the opportunity.
Strategies for Crypto Companies To Take Advantage
So, just how can savvy companies capitalize on the influx of new crypto users from Bitcoin’s next halving?
Refined Public Relations Strategy
Many potential newbies still think crypto is shady and complicated. Thoughtful media relations can change these negative perceptions; for example, getting featured in mainstream outlets shows that crypto is accessible. Messaging should focus on security, compliance and ease-of-use. Briefing editors on safety measures for new user funds also goes a long way.
Improved User Experience Design
A smooth, enjoyable user experience signals quality to the crypto-curious. Clean graphical interfaces, guided tutorials, and multilingual support prevent confusion. Preparing customer support for basic newbie questions will also set companies up for success.
Targeted Advertising
With crypto advertising still scarce outside enthusiast circles, there’s a huge opportunity for companies to connect with potential high-value user segments where they already spend time online. Leveraging demographics, interests and intent through laser-focused digital campaigns will raise awareness. Referral incentives can then recruit satisfied customers as brand evangelists.
Global Accessibility
Partnerships with familiar payment platforms ease onboarding. Companies can also selectively educate high-potential markets lacking crypto awareness, then guide users from education to funding accounts and utilizing assets. This requires localization and personalized support.
Social Integrated Products
Integrating crypto wallet connectivity, NFT galleries, and P2P payments into large existing social platforms taps into highly-engaged user bases who already trust those networks. Bear in mind that tailoring product messaging toward social audiences requires an authentically conversational style which is not overtly technical.
Simplified Account Funding
Streamlining initial account funding reduces friction through bank partnerships, enabling bank account, debit card and mobile wallet connectivity. Intuitive flows like “Buy Crypto With Card” demonstrate crypto’s real-world utility while speaking to what assets can accomplish for new users, instead of assumptions about ideological knowledge. Explainer videos further demystify processes like custody and storage for those without a technological background.
The Best Prepared Will Most Benefit
Bitcoin’s hardcoded halving cycles have already expanded its community many times over, bringing waves of new demographics and fresh opportunities. As mathematically inevitable supply shocks once again spark rising demand, the companies able to capture this interest through intuitive design, targeted marketing, and strategic accessibility improvements will find themselves poised to ride the wave of the next acceleration in crypto adoption and growth.
Brian Wang is a Futurist Thought Leader and a popular Science blogger with 1 million readers per month. His blog Nextbigfuture.com is ranked #1 Science News Blog. It covers many disruptive technology and trends including Space, Robotics, Artificial Intelligence, Medicine, Anti-aging Biotechnology, and Nanotechnology.
Known for identifying cutting edge technologies, he is currently a Co-Founder of a startup and fundraiser for high potential early-stage companies. He is the Head of Research for Allocations for deep technology investments and an Angel Investor at Space Angels.
A frequent speaker at corporations, he has been a TEDx speaker, a Singularity University speaker and guest at numerous interviews for radio and podcasts. He is open to public speaking and advising engagements.