When it comes to crypto news, any number of headlines can jump to the forefront. For years, the role of social media influencers had been discussed, but the Australian Securities and Investments Commission (ASIC) took steps to correct what is one of the most volatile aspects of a volatile industry.
In 2022, ASIC started to crack down on these influencers, creating an information sheet that addressed unlicensed financial services influencers. It was an important move in the right direction, but there is more to it than meets the eye.
ASIC’s move
When it comes to offering financial advice, you had better be licensed. The government is tightening regulations on creators who offer financial advice without having the required federally-issued license. ASIC warned that any influencers offering unlicensed financial services advice could face big fines and even up to five years in jail.
According to the ASIC information sheet: “ASIC monitors select online financial discussion by influencers who feature or promote financial products for any misleading or deceptive representations or unlicensed financial services.”
ASIC also stated that any profiting from affiliate links, the kind that direct followers to specific online brokers, could count as being an unlicensed financial service. Influencers have been advised by ASIC to ensure that content is “accurate and balanced.”
It is clear that ASIC has younger investors in mind with this move. This generation is heavily influenced by online personalities, particularly when it comes to financial decisions. A survey held by ASIC in 2021 showed that nearly 64 percent of Australians changed their behavior because of online posts made by financial influencers that they followed.
“Think about your content carefully and whether you are providing unlicensed financial services, such as providing financial product advice or dealing by arranging,” suggested the ASIC sheet.
The Role of Influencers in Crypto
Social media content creators play a role in a variety of industries, so it should be no surprise that they are involved in the crypto space as well. What most people don’t realize is that investing in a relevant content creator can be a major move for crypto brands and projects.
Creating High-Quality Content
Marketing in the digital space isn’t just abut being a famous name and telling people to go buy something. Content has to be informative and engaging. Whether it be a recommendation, product review, or educational video, followers are looking to learn from the influencers they follow.
The best content creators are the ones that can take a complex concept or idea and make it relatable in a way that viewers understand is a massive skill. Working with influencers can be a critical move for technical projects that may require a deeper explanation of industry knowledge in order to present in an understandable way to consumers.
Trust and Credibility
Given how volatile the cryptocurrency space is, trust is crucial. There are so many startup coins that disappear within days, so consumers are looking to find the next dependable entity. Influencers must foster trust and credibility in order to direct followers to specific products.
Influencers who are seen as reliable for crypto information show good judgement and do research on the things that they promote. Projects endorsed by influencers often see a healthy bump in credibility as well. Influencers are critical for getting new brands off the ground by helping to establish them as credible through relevant promotion.
Driving Brand Awareness
At the end of the day, the most important thing for many crypto brands is to drive awareness of that brand. Influencers build their following and work together with specific crypto communities to drive brand awareness.
Collaborations are a great chance to tap into reactive, supportive audiences in order to foster greater brand awareness. With strong engagement, it is possible for influencers to create strong brand loyalty than more traditional methods of marketing.
The Types of Crypto Influencers
There are several ways to categorize crypto influencers. They can be gauged by the kind of content they create, specific interests or topics, and follower count. Since it’s such a niche space, content can span any number of platforms, which is why reach, engagement, and their overall impact. With that said, there are four types within the crypto space:
Nano-Influencers
These are the smallest fish in the pond. An influencer with fewer than 10,000 followers may not seem all that important, but they tend to have some of the best engagement among crypto influencers. The reason for that is because their content is hyper-local and a lot more specialized than the largest influencers.
Content from nano-influencers tends to resonate more because the audience is targeted in a far more specific manner. The goal of this level of influencer is quality over quantity. Nano-influencers can be quite effective when it comes to generating word-of-mouth marketing at a cost-effective price for brands.
Micro-Influencers
With follower counts above 10,000 and up to 100,000, there is obviously a larger reach compared to nano-influencers. What may come as a surprise is that engagement actually goes up when jumping from nano- to micro-influencers. These influencers are largely seen as being more authentic than larger accounts, capable of speaking to a more niche audience as well as larger groups.
Micro-influencers are usually a great option for growing brands because they are highly effective partners for businesses that might not have the biggest marketing budget to work with. The goal here is to tap into a very specific portion of the target audience.
Macro-Influencers
Now we’re starting to get into larger accounts. These influencers reach anywhere from 100,000 to 1,000,000 followers. Their reach is tremendous, though maybe not on par with the final group. Still, their impact can be exponential for a cryptocurrency brand looking to reach its target audience.
These are key personalities within the crypto influencer space and tend to be well-known in the cryptocurrency world at large. These influencers also are highly persuasive to their followers. For brands, it can be something of a good in between that reaches a larger audience while also still having good engagement numbers.
Mega-Influencers
These are the whales of the crypto influencer world. With a million followers or more, these are the most identifiable, well-known, and influential personalities in crypto. To some, they are even considered to be the most knowledgeable in the space as well.
This group can include founders, CEOs, crypto pioneers, KOLs, and more. The massive following ensures that eyes are constantly on them, but engagement can be a bit tougher. The opinions of this group have the potential to make major market impacts. The downside is that community engagement isn’t as strong because they seem unapproachable.
Growing Regulatory Changes
If anything, the move by ASIC is just one of many moves to provide regulatory stability within the Australian cryptocurrency space. With the federal election coming, this is going to be an interesting time in the Australian cryptocurrency market.
The Australian Treasury Department, in addition to ASIC, have taken steps to ensure a more secure environment for cryptocurrency investors. Though the election could alter the direction of these moves, it is clear that the government has a clear direction when it comes to making the market safer.
