Crypto Winter Is Hurting Google's Advertising Empire
Nobody is safe from the crypto winter, not even Google. Crypto winter is hurting Google's advertising empire. Philipp Schindler, Google's chief business officer, said during Alphabet's third-quarter results call on Tuesday (October 25, 2022) that cryptocurrency companies and other financial institutions are spending less on ads.
Camilo WoodOct 26, 20223 Shares638 Views
Nobody is safe from the crypto winter, not even Google. Crypto winter is hurting Google's advertising empire.
Philipp Schindler, Google's chief business officer, said during Alphabet's third-quarter results call on Tuesday (October 25, 2022) that cryptocurrency companies and other financial institutions are spending less on ads. That is how crypto winter is hurting Google's advertising empire.
Philipp Schindler said:
“„In the third quarter, we did see a pullback in spend by some advertisers in certain areas in search. For example, in financial services, we saw a pullback in the insurance, loan, mortgage, and crypto subcategories.- Philipp Schindler
Schindler made two references to the crypto pullback but offered no further context or details. The cryptocurrency market suffered in 2022 as a result of investors' flight from hazardous investments and their selling of digital currencies as well as the linked equities that they had bid up over the previous two years.
Nearly 60% of the value of Bitcoin and Ethereum has been lost this year. Coinbase, a cryptocurrency exchange that went public in 2021, is down more than 70%.
In the meantime, the sector has been plagued by bankruptcies as lenders and hedge funds experienced a decline in liquidity and, in some circumstances, were compelled to make debt repayments. Celsius Network, Voyager Digital, and Three Arrows Capital are three well-known companies that had to go bankrupt.
Businesses elsewhere have made cuts. Blockchain.com laid off 25% of its employees in July, Coinbase laid off 18% the month before, and Crytpo.com laid off twice this year.
Since Google sees definite potential for growth in the future, there is hope that the crypto sell-off is only a temporary blip. Starting in 2023, Google stated that it will rely on Coinbase to enable consumers to pay for cloud services with cryptocurrency.
Additionally, Coinbase will switch from Amazon Web Services, which the business has been reliant on for years, to Google's cloud infrastructure for apps that deal with data.
Here is what you need to know about the crypto winter.
Crypto Winter Meaning
Crypto winter is characterized by price declines and protracted price stability. Analysts think that earlier in 2022, the foundations for the impending crypto winter were laid.
According to Igor Zakharov, CEO of DBX Digital Ecosystem:
“„The crypto market was already feeling the effect of world events, especially the Russia-Ukraine conflict that caused turmoil in global finance. Zakharov notes that high inflation has driven rising interest rates in the U.S., which is the biggest player in crypto. By the time TerraUSD and Luna collapsed [in May] and set in motion a domino effect in the crypto world, crypto winter had already begun.- Igor Zakharov, CEO of DBX Digital Ecosystem
Crypto Winter 2022 And Job Loss
Not only are cryptocurrencies themselves suffering in this environment, though. The people and businesses that created cryptocurrency are also having problems.
Grayscale CEO Michael Sonnenshein on crypto winter
Numerous blockchain and cryptocurrency businesses have experienced major losses and job cuts. On August 19, the cryptocurrency lender Hodlnaut said that it had laid off 80% of its staff.
In August, Robinhood (HOOD), a company that offers cryptocurrency trading on its platform, let go 23% of its workforce, claiming that the 8% employment cuts it had made in April weren't enough to account for the crypto meltdown and the broader bear market.
OpenSea, a leading NFT marketplace, reduced its workforce by 20% in July. This happened after trade on its platform dropped by 99% from its peak in May.
People Also Ask
How Long Will Crypto Winter Last?
Crypto winter only started in June 2022, according to cryptocurrency investment firm Grayscale Investments. Since the typical crypto winter lasts four years, it's possible that recovery won't happen until 2026.
Will There Be A Crypto Crash In 2022?
Yes, crypto crashed in 2022. The cryptocurrency markets are tumbling. The value of cryptocurrencies declined by around $1 trillion between May and June 2022.
Is Crypto Going To Crash Further?
Numerous analysts claim that another crypto winter is already taking hold. Experts predict that cryptocurrency prices will likely stay low for the foreseeable future, just like they did between early 2018 and mid-2020, due to a market collapse, layoffs, and the ongoing liquidity problem in the industry.
Conclusion
Crypto winter is hurting Google's advertising empire badly. With the exception of the first quarter of the pandemic, Google's overall ad growth of 6% in the quarter was the lowest since 2013. From the previous year, YouTube's ad revenue decreased.
Latest Articles
Popular Articles