How Brands Are Benefiting From The Crypto Craze
Are you a part of the cryptocurrency craze? It’s hard not to be when family, friends, and now brands are joining in on the excitement. Institutional interest in cryptocurrency has been building for some time now with companies like PayPal, Taco Bell, Tesla, and the MLB moving into the crypto space. Specifically, NFTs have gained widespread interest from these brands who have capitalized on them to boost engagement. Other assets, like Bitcoin, are volatile, while NFTs are so new and hyped-up that it is difficult to know what they will be worth over time.
NFT stands for “non-fungible token,” which is a cryptographic blockchain asset that contains unique metadata. Because they are non-fungible, they cannot be exchanged at equivalency like fungible currencies, such as the U.S. dollar, where each dollar has an identical value. NFTs have been used to represent a range of commodities such as artwork, gaming collectibles, and even real estate. Proponents of NFTs believe they represent the future of collectibles and the expanding digital resource economy.
Aside from the potential to create a super-valuable collectible, there are promotional and practical reasons for brands to embrace NFTs. For starters, an NFT can’t be forged or copied, introducing a new level of security to online property. NFTs also give brands more room to be creative with promotional events. Tom Mizzone, CEO of Sweet, an NFT startup that works with brands and artists says, “It creates an incremental revenue opportunity for brands, but there is also all kinds of fun, social engagement”.
Taco Bell created five pieces of digital art inspired by tacos. The company turned the digital files into NFTs and put the art for sale on an online marketplace called Rarible. Rarible’s marketplace shows that Taco Bell sold it for .001 Ethereum or $2 at the time, and the buyer resold it for 10 Ethereum, which was close to $20,000. Ideas like this promote brand equity. Through ownership of exclusive NFTs, collectors can feel a deeper sense of connection with their favorite brands, which translates into increased customer loyalty. And since brand NFT collectibles could be sold on secondary markets for profits in the future, like Taco Bells, purchasing a brand’s NFT could be a new way for consumers to invest in their favorite companies.
Michelob Ultra used the buzz surrounding Bitcoin to help promote their new seltzer drink earlier this year. The Anheuser-Busch InBev brand gave away one Bitcoin to the winner of a social media sweepstakes. To enter, people had to reply to a social media post from the brand on March 22. The insight behind the effort was to seize on the rising conversation about all things virtual and artificial, including cryptocurrencies, and use it to promote their new product.
Back in February, NBA Top Shot crossed $232 million in total sales since it started last year — including $47.5 million in sales on a single day. Following that, Topps, the 83-year-old MLB card company recently revealed that it will issue its highly coveted baseball cards as NFTs in partnership with the MLB and the MLB Players Association.
Today’s brands are competing in a whole new post-pandemic world of digital consumerism filled with virtual experiences. This new trend holds a lot of opportunities for brands to capitalize on the creativity the digital world allows for. No one knows how long cryptocurrency and NFTs will continue to thrive, but brands who realize the potential now can benefit quickly.