In the United States: Bitcoin ETFs are targeting the "mom generation"

Is Bitcoin a safe and secure investment for baby boomers? Judging by the increasing number of advertisements on American streets, the answer would seem to be yes.

As we all know, on January 10, the U.S. Securities and Exchange Commission approved the first 11 exchange-traded funds in the United States that directly hold Bitcoin.

Currently, companies issuing Bitcoin ETFs include BlackRock, the world's largest investment management company, and smaller cryptocurrency companies such as Bitwise Asset Management. Eric Balchunas, an analyst at Bloomberg Intelligence, believes that increased market competition will force the above companies to differentiate themselves, because as of now, almost all companies' products are homogenous in terms of customers and sales purposes.

"They all adopt similar market operations," he said. "This puts a lot of pressure on marketing because when external conditions are the same, you have to find a way to break into the market and stand out."

Balchunas said that the target audience of the ETF is investment advisors and investors, who are more mature, wealthy and risk-conscious than native Bitcoin enthusiasts.

In other words, they are usually the "parents" of typical cryptocurrency trendsetters, and recently, some asset managers have begun to target this customer.

In a promotional video released by VanEck on X on January 10, a conversation between a mother and son about investing in Bitcoin is described.

At the beginning of the video, a contact named 'Mom' texts: 'How can I buy Bitcoin? ' "It's easy now..." Her child immediately texts back, saying, "There is an ETF." "WOW! Thank you," the mother writes, adding hearts, smiley faces and other emojis.

In another VanEck post, he called baby boomers "the best generation in the world" and that Bitcoin could help them "protect themselves from the effects of inflation that devalues ​​their hard-earned money."

From Jan. 11 to Jan. 30, companies including VanEck, Bitwise, Wisdom Tree and Grayscale spent about $300,000 on TV ads during financial news programming, traditionally broad-based shows such as CNBC’s “Squawk Box” and Fox Business’ “Cavuto: Coast to Coast,” according to ad measurement firm iSpot.tv.

In addition to catering to an older audience, the advertising strategy surrounding ETFs is also very different from the multi-million dollar cryptocurrency "money-throwing" wars in the previous pandemic era in many ways.

First, it’s unlikely that a celebrity like Tom Brady, who has previously starred in ads for cryptocurrency exchange FTX, will appear in the new ads.

In response, Ira Gluck, a senior director at the Financial Industry Regulatory Authority (Finra), said that any recommendations about these strictly regulated financial products must come from industry professionals with a professional background. Finra regulates broker-dealers that work with management companies to market and distribute securities such as ETFs. When promotional activities violate regulations, Finra will impose fines or other penalties on violators.

But despite this, some companies have found sneaky ways to use well-known "familiar faces" to attract attention.

On Dec. 18, weeks before the SEC’s decision, Bitwise released an ad in which actor Jonathan Goldsmith expressed his interest in Bitcoin.

Bitwise was able to run the ad before the SEC ruling because it wasn’t promoting any specific product, said Ricky McRoskey, director of creative and content marketing.

Hashdex, another cryptocurrency-focused investment firm, also released two videos ahead of SEC approval aimed at increasing its brand awareness among older demographics, marketing head Chris Glendening said.

Analyzing from the advertisement, the video uses news clips from decades ago, comparing traditional investors' skepticism about Bitcoin with their concerns about the growing popularity of personal computers in the 1980s and Burger King's decision to accept credit cards in 1993. Glendining said: "We will continue to work hard to provide background information on digital asset investments for the older generation of investors."

It will be a long game. Like Bitwise, Hashdex has not directly promoted an ETF.

But currently, companies promoting Bitcoin spot ETFs still face other legal restrictions besides being able to use celebrity endorsements implicitly.

Finra senior director Gluck said regulators want to ensure that all marketing materials for ETF funds prominently disclose the risks associated with the speculative assets they hold. "The campaign must inform consumers that if the private keys used to authorize fund transactions are stolen, or if investors become victims of fraud, they may lose all the money invested in Bitcoin." He said Finra may require advertisements to disclose the above information through voiceovers rather than putting it in an unobtrusive slide at the end of the video.

“Regulators don’t want people to be misled into thinking that because Bitcoin is regulated, it’s safe,” Gluck said.

And regardless of oversight, these companies’ digital advertising channels are expanding.

Following the SEC’s approval, Alphabet began approving Bitcoin ETF ads on its platforms, including Google Search and YouTube, an Alphabet spokesperson said.

Facebook and Instagram may soon follow suit. Parent company Meta Platforms is currently updating its U.S. policies in light of the SEC’s decision, a spokesperson said.

Of course, not all approved Bitcoin ETF activity is aimed at baby boomer parents.

Some large, established asset managers are attempting to incorporate crypto aesthetics into their communications in an attempt to build credibility in the bitcoin community.

Vicki Chan, VanEck's director of content strategy, said that VanEck's first TV commercial for its HODL Bitcoin ETF included many Easter eggs for cryptocurrency enthusiasts, such as a scene shot at Pubkey, a Bitcoin-themed bar in Manhattan.

Others are trying to use their size and history as a selling point. Grayscale Investments has been advertising its GBTC Bitcoin fund on TV screens and in airports across the country, positioning it as the oldest and largest cryptocurrency ETF.

The company plans to use humor to appeal to a wider audience rather than targeting older investors, Chief Executive Michael Sonnenshein said.

“We believe that investing in this digital asset class is a once-in-a-generation opportunity,” Sonnenshein said. “One of the best ways to communicate that is to not segment the audience we’re going after, but to think about what can transcend different generations and different types of investors.”