May 18, 2021

Crypto Media Might Not Always Look This Great

It’s been a remarkable 2021 for the major players in crypto-related media. So many publications are seeing their audiences catapult above traditional financial publications and revenue is following.

According to Axios:

Founded in 2018, Blockworks is one of several crypto-focused media companies with skyrocketing revenues.

The company anticipates $8-$10 million in revenue this year, Yanowitz tells Axios — up 3x from last year.

Similar to how previous cycles in crypto saw the emergence of new exchanges, this current cycle has seen an emergence of several media firms all trying to win mindshare in a young market,” says Mike McCaffrey, CEO of The Block, a cryptocurrency-focused media startup.

The big picture: The risk with these companies for several years was that the crypto market could at any time fade away. But today, that seems unlikely. Nearly 15% of all U.S. adults own some form of cryptocurrency.

Both publications mentioned in that Axios blurb—Blockworks and The Block—launched during the down crypto market when the audience had already given up on crypto. When I was at CoinDesk, though, I had the joy of riding the last bull market up. When I started in November 2016, we were at just below 1 million monthly users. By December 2017, we had over 12 million users on the site. During that time, the price had gone from under $1,000 to just about $20,000.

As you can imagine, with prices hovering in the mid-$40,000s now, that traffic to these sites is even more significant. I’ve heard that CoinDesk is now at 20 million monthly users. To put that into context, The Wall Street Journal with a newsroom that is probably 20x the size only gets 42 million monthly users.

The important thing to understand about this is that the crypto media story is one built on a retail obsession with the price. The vast majority of the visits to these sites are to price pages, where you can see the charts move in almost real time. People have become so obsessed with looking at charts, TradeView—a charting platform for all assets—has seen its number of visits grow from 1.2m to just shy of 2 million since November (according to SimilarWeb).

And the biggest crypto players have benefited from this as well. Let’s dig into some SimilarWeb numbers so I can further illustrate this point. CoinMarketCap, the largest “crypto price” company in the world has just over 200m visits in April. Yahoo Finance, which was recently part of the $4B sale by Verizon, had 280m visits in the same period.

CoinDesk, to a lesser extent, also benefits from this. For years now, one of the most searched keywords in crypto was “Bitcoin Price.” With the rise of ethereum, “Ethereum Price” also started to see a significant increase in search activity. If you search for both of those, you’ll see CoinDesk first. Because of this strong organic ranking to the price pages, CoinDesk’s traffic has grown far faster than the newer publications that are more dependent on their news for the audience.

SiteNovember VisitsApril Visits
The Block1,100,0002,800,000
Source: Similar Web

Decrypt and The Block roughly doubled between November and April. CoinDesk and CoinMarketCap both increased by more than 4x. Why? Because both of them benefited from the addictive nature that is 24/7 crypto pricing and people’s need to know how rich they are because a billionaire space entrepreneur was tweeting about a dog coin.

This isn’t meant to disparagage any of these sites. Or the audience really. I’m addicted to looking at it as well.

The problem with living by the price is that you die by it as well. And this brings us back to the last bubble to act, in some part, as a reminder of what could happen this time. By December 2017, we were riding high at CoinDesk with over 12 million monthly visits. By the end of 2018 and going into 2019, we dipped below 2 million users. The price dropped from $20k to around $3,000 at the same time. The audience ran away because they had all been burned.

The ad market followed. Most advertisers are in the direct response business. When prices are moving up, there are a lot of new investors, so the exchanges spend quite liberally. But when all you’re left with is the crypto die-hards, the advertisers leave.

This makes it very complicated to run an advertising-exclusive media business. You’re effectively operating through the ebbs and flows of the crypto markets. Financial planning is tricky. Picking space for events is complicated. Running a balanced budget when you don’t know what the price will be a year from now is hard. And besides, if you could accurately predict the prices of these speculative assets a year from now, would media really be the right business for you?

The final problem is that the vast majority of this reporting is closer to general investment/business reporting than deep, b2b reporting (with some exceptions, of course). The highest-trafficked pieces tend to be about why the price moved or which famous person is now bullish on the asset. These stories fit perfectly into Bloomberg or The Wall Street Journal. I’ve always found it odd that both publications invest so little in their crypto reporting. That will have to change at some point.

All of this points to a series of booms and busts in the industry. In my six years working in crypto media, I saw multiple media companies go out of business and quite a few layoffs. CoinDesk nearly went bankrupt during the 2014/2015 lull.

When you look at crypto media, you start to see an area of focus that is quite hard to operate in.

  • The bulk of the audience is interested in price movements and leave when prices crater.
  • The bulk of the advertisers are looking for those new users interested in price movements and will leave when it’s just the crypto regulars that remain.
  • In good times, companies overhire, jack up their fixed costs, and then are left with bloated costs when the market turns.

But there is a newer story that is beginning to develop in crypto, which makes it interesting to some extent. There’s been this broad discussion about the “arrival of institutions.” Honestly, I had a full head of hair the first time I heard that, and, well, yeah. But this time, it actually seems likely.

This is an important development because this gives some in crypto media the ability to move away from the price movements and serve a deeper purpose. Think about your run-of-the-mill hedge fund. Where are they getting the price for bitcoin? It’s not CoinDesk, CoinMarketCap, or any of those other sites. It’s Bloomberg. They’re also not likely reading “here’s why the price moved” stories.

The future of crypto media—and one that should be able to weather the downward cycle that tends to follow these times of exuberance—needs to have a much deeper focus on this market. That requires a couple important things that the company needs to get right.

First, there needs to be an investment in unique data. I could spend time spelling this out, but for a bunch of media operators, it’s about as useful as knowing how to build a factory. Suffice it to say, this type of audience will require in-depth and unique crypto data.

Second, reporting has to include the proprietary data. Much of crypto is foreign to traditional institutional investors. Any reporting that is done needs to find ways to bring the data in so that the audience learns how to use the tools.

Just reporting on what’s happening isn’t enough because there are so many reporters across crypto media chasing that same story. It’s a remarkably bloated industry. However, for the crypto media companies that can find a way to link their reporting and data, there’s a unique opportunity there.

It is, ultimately, an opportunity worth paying for. While I do believe that there is an advertising business to be had in crypto since most of the coverage is tied to the financial asset, the focus should be on subscriptions. The audience is primarily investors rather than operators; therefore, the traditional b2b strategy that I might run at Morning Brew doesn’t truly work here.

If I were looking at this space, either as an operator or an investor, that’s what I’d have my eye on. Which player can blend proprietary data with solid reporting? That’s the company that will be able to withstand the ebbs and flows of this market.