The developers of the popular TikTok app announced new rules in the advertising policy on the company’s platform. Now cryptocurrencies also belong to the category of topics prohibited for advertising.
New video posting rules prohibit users from posting advertisements about financial products regardless of their geographic location.
Recall that it was thanks to the hype from TikTok at the beginning of this year that many altcoins showed impressive growth, since well-known representatives of the platform’s community were actively promoting various coins.
Let’s start with an explanation. TikTok has indeed become a PR platform for various cryptocurrencies – and for a long time. Back in July 2020, a user under the nickname cannolicrypto posted a viral video about DOGE. In the video, he invited each user of the application, the number of which was then 800 thousand people, to invest $ 25 in Dogecoin. According to the author of the video, this would lead to a huge increase in the price of the coin, up to one dollar. In this case, the initial investment would supposedly turn into 10 thousand dollars.
The video received tens of thousands of likes and hundreds of thousands of views. What is especially important: at the time of the publication of the video, the cost of DOGE was 0.23 cents. Well, the cryptocurrency set its historical maximum at 73 cents on May 8, 2021. Accordingly, someone could really increase their investment hundreds of times in a few months.
Dogecoin price chart for a year
However, newcomers lost money on investments anyway. Nevertheless, investors without experience not only did not buy the asset on time, but also could not sell it – including zero. Therefore, many now hold considerable DOGE reserves in order to drain them when they reach their former highs or other decent growth.
Representatives of the video platform are not satisfied with this situation. Therefore, they made changes to the way TikTok works.
Cryptocurrency and TikTok
Tiktokers began to actively promote Dogecoin in the summer of last year: then the altcoin grew by about 20 percent during the massive efforts of video bloggers. Of course, he cannot be compared to the growth that DOGE, including arranged by Elon Musk, earlier this year.
The same pump DOGE, arranged by tiktokers last year
Tik Tok has also frequently promoted the Cumrocket coin, which has seen two waves of impressive growth in April and June this year. However, against the background of its current fall, it becomes clear why the company decided to ban advertising of digital assets: Cumrocket, like DOGE, seriously sank in price, that is, inexperienced young investors have lost a lot of money .
Cumrocket chart
This is how Martin Bamford, head of customer education at Informed Choice, commented on it all. His line is quoted by Cointelegraph.
TikTok restricts directly or indirectly sponsored content that leads to an affiliate link – for example, to register on a trading platform and receive free promotions. We see a huge amount of such branded content on TikTok, usually from poorly informed users who lure subscribers with promises of wealth, but are actually making money from people who follow affiliate links.
We are talking about referral links that bring a percentage of income to their creator. To do this, the latter need to attract new people and force them to use this or that service. In the world of cryptocurrencies, this situation is not uncommon – including on Twitter.
And while in Tiktok they say goodbye to the crypt, it is actively used by the 277-year-old British auction house Sotheby’s. The day before, during the auction, it sold a diamond worth 101.38 carats for $ 12.3 million. According to representatives of Coindesk, the deal is notable for the fact that the anonymous buyer of the lot paid with bitcoins. At the same time, the representatives of the auction house themselves noted this as «an important milestone in the adoption of crypt ovalutes.»
We believe that a change in TikTok’s rules is unlikely to stop the wave of mass popularity of cryptocurrencies. Yet many people already know about the growth opportunities for coins thanks to the events of 2021. In addition, video bloggers can find another way to promote various cryptocurrencies that will not violate the established norms for using the application. Or at least they will try to do it.
