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How The Crypto Winter Affects Google’s Ad Business

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according to report According to CNBC, tech giant Google has been hit by the downtrend in the cryptocurrency market. The company recently released its third quarter 2022 earnings report, which showed lower earnings due to declining values ​​across asset classes in the early days.

In 2021, when the price of Bitcoin and other cryptocurrencies was in the price discovery stage, crypto companies spent millions of dollars in advertising and marketing. used to attract new users.

Google’s Chief Business Officer (CBO) Philipp Schindler has acknowledged the negative impact of reduced spending from cryptocurrency companies and the financial sector.

In Q3, we found that some advertisers spent less in certain areas of search. Financial services, for example, saw setbacks in subcategories of insurance, loans, mortgages and cryptocurrencies.

Crypto Bear Slowdown Google Ad Revenue

Outside of a brief period at the start of the COVID-19 pandemic, the tech giant’s third-quarter ad growth was the worst since 2013, according to data provided by CNBC. In addition to crypto winter, the company highlighted unfavorable macroeconomic conditions.

In the US, inflation has reached a 40-year high. This surge has caused the Federal Reserve (Fed) to tighten market conditions, raise interest rates and reduce global liquidity.

As a result, the cryptocurrency market has lost over 60% of its market capitalization. Prominent cryptocurrencies such as Bitcoin and Ethereum have crashed to 2017 levels.

In traditional markets, the situation is equally dire. Over the past year, Google has recorded his 24% decline from his high of about $150 per share.

Crypto companies have followed a similar trajectory. Coinbase (COIN) debuted in his April 2021 stock price hit a record high of $440 and lost more than 80% of its value in the following year. At the time of writing, the price of COIN is trading at $74.

The price of COIN is trending downward on the daily chart. sauce: COINUSD Tradingview

Google bets big on cryptocurrencies

Google’s advertising business demonstrates the connection between the legacy sector and the cryptocurrency sector. Big tech companies and other tech giants such as Microsoft and Meta are consolidating their footholds in emerging industries.

bitcoinist report Google has invested $1.5 billion in crypto-focused companies through parent company Alphabet from September 2021 to June 2022. Google is just following traditional corporate-wide trends.

These companies invested more than $6 billion in digital asset firms in the same period, according to a report from research firm Blockdata. The chart below shows that Alphabet has invested in his Dapper Labs, Vultage, Fireblocks, and Digital Currency Group (DCG). The report describes these investments and the traditional companies’ potential strategies as follows:

Alphabet and Blackrock show very different strategies of betting heavily on a few companies (…). Banks are beginning to increase their exposure to crypto and blockchain services (some more than others) as customer demand increases. This has led them to invest in cryptocurrency custody, wealth management and trading.

Google Crypto p-100-public-companys-investing-in-blockchain-and-crypto-companys-479x660
Investments in Alphabet, BlackRock, Samsung, and other cryptocurrency companies.Source: Block Data

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