Storyboard | The pitfalls of influencers promoting crypto
11 Sep 2021
Advertising is quite artful – it can convince people to spend money on anything, even products which are not always good for them or even necessary. In recent years, advertising has become an untamed beast with the advent of the internet. Along with the usual creative heads, influencers now have a considerable effect on the trends of the day.
The appeal of influencers lies in the fact that they are everyday people, but with one small difference – they are the ‘cool kids.’ What they consume is automatically trendy, and their followers trust the brands they advocate for. Simply put, social media influencers offer an easy way to build brand trust. It is dangerous then that these influencers are making cryptocurrency trendy for their unsuspecting followers who do not fully understand this risky asset class.
The coolness factor
A recent study shows 18-34-year-olds account for 40% of crypto owners globally, indicating a higher disposition among a demographic which is hyper connected with and influenced by social media. This has led to an interesting trend in India, wherein influencers are promoting cryptocurrencies like handbags and shoes. In the process, they are doling out a risky instrument to followers who are probably financially unaware.
In fact, the level of financial awareness in India already leaves something to be desired. When you add cryptocurrency to the mix and sell it as ‘cool’, the risk only grows manifold. If more influencers join the bandwagon, they could end up creating a trust bubble for something that is not yet fully understood and when that bubble bursts, it could forever alter customer behaviour.
Some onus also lies with the consumer, who must research and understand this instrument before investing. A larger risk appetite in itself is not bad. However, an uninformed risk appetite can prove to be disastrous.
The trust bubble
As an insurance marketer, I am not a stranger to issues of consumer distrust. Despite reforming its practices, the industry still has to go the extra mile in proving its transparency.
While cryptocurrency understandably has a high interest, people are unaware of its nuances. Irresponsibly promoting it can be irreparably damaging - not only for people’s financial stability, but also this emerging industry.
While there is no inherent issue in creating a market for your product, what’s risky is not explicitly divulging the risks involved. Cryptocurrency is unregulated in India, which leaves wider room to scam consumers.
With the escalating influence of social media, people must consume information with a pinch of salt and determine facts for themselves before acting. Influencers too must be cautious of what they promote.
Ignorantly passing on the Kool Aid can prove catastrophic!