2 years after FTX fiasco, crypto has a major image issue. It’s not too late to rebrand

Now, 63% of Americans have little to no confidence that current ways to invest in, trade or use cryptocurrencies are safe and reliable, according to data published this month by Pew Research Center.

It’s apparent that crypto has a major reputational problem. But it wasn’t always so.

Cryptocurrency emerged in the ’00s as an ideological response to the centralized control of financial systems and the flow of capital from central banks. The movement stemmed from libertarian ideals, rejecting traditional financial institutions in favor of trustless, peer-to-peer transactions. The 2008 Bitcoin white paper penned by the pseudonymous Satoshi Nakamoto first crystallized this pioneering spirit, advocating for a digital currency free from the grip of central banks and regulators.

Many investors and consumers were enamored with the promises of financial autonomy and privacy, tapping into a growing distrust of established institutions, especially in the aftermath of the 2008 financial crisis. Early crypto enthusiasts saw blockchain technology as a way to democratize finance, bypass gatekeepers and empower individuals globally.

Since then, the industry has been marked by a series of dramatic boom-and-bust cycles, driven by a mix of speculation, innovation, regulatory uncertainty and optics problems that have impacted crypto’s adoption. Bitcoin’s early days were slow, but the currency saw explosive growth in 2011 as enthusiasts and investors flocked to the idea of a decentralized currency. However, a hack of the prominent Mt Gox exchange in 2014 – resulting in the theft of hundreds of millions of dollars worth of Bitcoin – triggered the first major collapse, shaking investor confidence.

Around 2017, crypto markets experienced a second wave of exuberance, with Bitcoin reaching nearly $20,000 and initial coin offerings (ICOs) raising billions. New tokens such as Ethereum gained traction among investors. But the bubble burst in early 2018, partly due to regulatory crackdowns on ICOs and the realization that many projects were either overhyped or outright scams. The market plummeted, with Bitcoin shedding over 80% of its value.

Then came the rise of the broader decentralized finance (DeFi) movement in 2020, as decentralized lending and borrowing gained popularity. The internet delighted in the GameStop short squeeze in early 2021, a direct result of meme stock chatter on Reddit. Around the same time, the NFT frenzy took off. Crypto prices soared, with Bitcoin peaking near $69,000 in November 2021. But the euphoria was, again, short-lived. A cascade of bankruptcies and scandals in 2022 – most notably the collapse of FTX and SBF’s fall from grace – sparked another significant downturn, prompting renewed scrutiny of the industry.

Now, the industry’s valuation has fallen from its previous highs. As of October 30, the sector’s market cap was around $2.43tn, compared with its peak of $2.86tn in 2021, according to data from CoinMarketCap, which publishes pricing and valuation data and news about the industry.

Accessibility, trust, regulation, oh my!

Beyond the economics, consumer trust in crypto remains low – and the reputation of the industry on the whole is mixed at best.

Of course, there are the basic, pragmatic issues of accessibility and ease of use. “If you were to ask someone to pay you back for lunch using crypto, sending tokens between wallets comes with long and complicated addresses and fees for each transaction,” says Alona Stein, co-CEO of PR firm ReBlonde. “So, of course, you would rather pay someone back with fiat currency.” She expects that until crypto transactions are streamlined for greater simplicity, crypto “doesn’t stand a chance for mass adoption.”

Beyond this simple fact, however, is a deeper issue spurred by mistrust. In short, blockchain-based currencies have, since their inception, been viewed as scammy and highly risky. Negative perceptions stemmed from links between Bitcoin and the dark web and a smattering of over-hyped ICOs. And the problem was only exacerbated by various high-profile scandals that rocked the industry in the decade between 2013 and 2023.

“Crypto’s PR problems go back to Bitcoin’s beginnings, with people confusing decentralization with volatility and the use of cryptocurrencies [on] the dark web,” says Chunyang Shen, co-founder of Jarsy Inc, a digital finance and tech consultancy that works with blockchain and crypto companies. “Every [bit of] hype, whether it was ICOs or DeFi, has been paired with various scandals or regulatory actions – and public opinion follows… This cycle has created the feeling of unpredictability and therefore undermined public confidence.”

To add to the scams and controversies that have marred crypto’s image in recent years, the industry remains largely unregulated, giving it a ‘wild west’ image and creating a piecemeal approach to oversight.

For example, in the US, the Internal Revenue Service (IRS) classifies cryptocurrency as property – meaning that gains are subject to capital gains taxes. But the Commodity Futures Trading Commission treats crypto as a commodity. Meanwhile, many crypto firms choose to categorize their tokens as ‘utility’ or ‘transactional’ tokens rather than securities in an effort to avoid stricter oversight. This pattern has led to friction with the SEC, which argues that many of these assets still qualify as investment contracts.

Unclear and incomprehensive regulation of the industry has likely diminished consumer trust and worsened crypto’s reputational problems.

Some industry leaders, such as Coinbase CEO Brian Armstrong, have persistently advocated for better industry regulation. Effective regulation may not only improve consumers’ perceptions of crypto but also, Armstrong contends, prove beneficial for business. He has argued that a confusing regulatory environment incentivizes crypto companies to base their operations offshore, making it difficult for the US to maintain a competitive edge in digital assets. More explicit rules of the road could help the industry thrive domestically by providing a structured environment for innovation and security, he has said.

At the same time, high-profile failures such as the collapse of FTX have driven a new willingness to work within regulatory frameworks to foster trust and stability. Today, industry leaders and companies are more likely to advocate for balanced oversight, aiming to legitimize the sector and attract institutional investment while preserving some of the decentralization principles at crypto’s core.

Now, the tide of regulation is gradually rising.

In June, the US Treasury Department cemented a rule designed to crack down on crypto users who may be evading taxes. It requires crypto exchanges, payment processors and other brokers to report new information on users’ sales and exchanges of digital assets to the IRS.

And last year, two comprehensive bills, the Blockchain Regulatory Certainty Act and the Financial Innovation and Technology for the 21st Century Act (FIT21), were introduced to Congress. However, while FIT21 passed in the House, neither is expected to be greenlit by both chambers.

Meanwhile, across the pond, Europe’s Markets in Crypto-Assets (MiCA) regulation was adopted in April of 2023. It represents a more comprehensive approach, mandating enhanced transparency, security and consumer protections. Full compliance deadlines are approaching later this year.

Progress on the regulatory front could potentially brighten consumer sentiment around crypto and lead to growth in the market.

“With regulatory clarity on the horizon, the industry may be on the brink of a significant rebound,” says Ben Putley, co-founder and CEO of Alkimi, a blockchain-based ad exchange.

The ‘bro’ problem

While more comprehensive regulation is sure to assuage some of crypto’s PR woes, the industry will still need to grapple with a deeper-seated cultural problem: the long-held perception that crypto is an exclusionary playground run by men.

It’s an image driven and reinforced by the bare facts of the industry’s makeup: last year, women occupied 26% of total jobs in the industry and just 6% of leadership positions, according to a report from Cointelegraph. Crypto investors, too, skew largely male. In 2023, out of 420 million crypto holders around the world, only 37% were women – though this is up significantly from just a few years prior.

“Crypto’s ‘bro’ problem is very real,” says Jeremy Berrington, chief strategy officer at Scrib3, a marketing and comms agency representing web3 and crypto brands.

However, the demographics of the industry are somewhat unsurprising, Berrington says, considering that its talent and investors have largely come “from other historically male-dominated industries such as traditional finance, software engineering, venture capital and so on.” It’s hard to overcome the disproportionate representation of men typically found in those fields, he says.

The sector’s ‘bro culture’ has been repeatedly cited as a barrier to mainstream acceptance. Marked by exclusivity, insider jargon and relaxed approaches to professionalism, the culture tends to alienate diverse audiences – and entrenches crypto as a ‘boys’ club,’ limiting its appeal.

“The ‘bro’-centric image prevalent in the crypto industry… has hindered mainstream acceptance,” says Valentina Drofa, financial market consultant and the co-founder and CEO of Drofa Comms, an international PR consultancy specializing in the financial and fintech sectors.

She says crypto leaders frequently reinforce “juvenile” stereotypes, sporting ultra-casual attire at high-profile industry events and behaving in “laidback” ways that contrast sharply with the norms of traditional finance. SBF, for his part, flaunted a notoriously disheveled style at FTX and was reportedly once seen playing video games during a pitch call with Sequoia Capital.

But it’s not just the male-dominated leadership or the casual attitudes that have hampered the crypto industry’s reputation – the sector has long faced allegations of outright misogyny, too.

Earlier this year, Copper, a crypto firm chaired by former UK chancellor Lord Philip Hammond, faced backlash for hosting a party where sushi was served on near-naked models, reigniting concerns about the industry’s culture.

Just two months later, Neel Somani, founder and CEO of Ethereum scaling company Eclipse, announced he would step back from his role as the company’s ‘public face’ following a slew of sexual misconduct allegations.

Even with many experts in the field acknowledging the need for change, some continue to justify outdated ideas about who belongs in the industry and who doesn’t.

In an effort to explain the gender imbalance in crypto, for example, Jonathon Narvey, the founder and CEO of tech PR firm Mind Meld PR, tells The Drum: “It’s just a fact of life that more men are attracted to topics such as finance and investing. That’s because biological incentives are at play. A man without money has difficulty competing in the dating and marriage market. And men will go to extreme lengths, undergoing seriously risky behavior to get ahead financially. In contrast, women with zero dollars in the bank, no appetite for risk and no interest or talent for investing or finance will often have no problem finding a mate. That’s why there are way more men in crypto and there will always be more men in crypto, by a large factor.”

It’s not just women who have been ostracized by the industry. Ethnic and racial minorities, too, have been exploited by crypto companies, even though Pew Research Center data indicates that Black and Asian adults invest in crypto at higher rates than white adults.

Last week, Better Markets, a nonpartisan nonprofit organization dedicated to financial industry reform, published a new report detailing the ways in which the industry has capitalized on financial inequalities to target minority communities. The report points to Bitcoin ATMs, which are disproportionately clustered in Black, Latino and low-income neighborhoods, noting that these machines often charge fees as high as 22% and frequently limit users’ ability to withdraw funds.

“Minorities and low- and moderate-income communities are not getting financial inclusion; they are being ripped off by predatory inclusion,” said Better Markets CEO Dennis Kelleher in a statement.

Now, pressure is mounting on the industry to evolve culturally – and to update its approach to messaging to reflect greater fairness and inclusivity.

“Cryptocurrency needs a new approach in positioning itself to be more welcoming and start speaking with the language that will resonate with a more diverse audience,” says Jarsy Inc’s Shen.

It’s possible that this transition will happen naturally as a result of the market’s expansion, Scrib3’s Berrington contends. “As crypto continues to grow and people within the industry interact with more people outside the crypto world – and encounter some negative consequences of the bro culture, perhaps for the first time – it stands to reason the industry will become more tolerant of other viewpoints and less ‘bro-y’ as a result,” he says.

The recipe for a rebrand

Ultimately, experts say, the crypto industry requires a major facelift should it hope to grow in size and build a positive reputation.

“If crypto wants mass adoption, it needs a rebrand that’s accessible, responsible and credible,” says Adrienne Uthe, founder of PR and risk management firm Kronus Communications. “The most successful brands and leaders will be those who simplify the message, focus on transparency, and showcase tangible use cases that directly improve people’s lives.”

These principles are echoed in the words of other experts, such as Shannon Blood, senior director of marketing and branding at blockchain company InFlux Technologies. “If crypto wants to shift its image, leaders in the space should lean into transparency, accessibility and real-world education,” she says. Highlighting practical uses for blockchain and demystifying the tech can make it feel more approachable. Emphasizing inclusivity, showing how crypto can benefit society and offering straightforward educational resources would go a long way in changing public perceptions.”

Blood expects that as regulatory frameworks solidify and crypto organizations express responsiveness to consumer demands – such as for increased data privacy and sustainability – crypto can drive wider adoption and remedy its tainted image.

“Right now,” she says, “crypto has a great chance to redefine itself.”