As technology executives are forced to account for drop in income For investors, a new scapegoat has emerged: cryptocurrencies.
Philipp Schindler, Chief Commercial Officer of Google, guilty The slowdown in the company’s growth is due in part to a reduction in ad spending by crypto firms during a Q3 earnings call.
semiconductor company AMD similarly bound its own revenue disappointment, among other things, from falling demand for graphics processing units (GPUs) that can be used to mine cryptocurrencies. Revolut, the new finance app, said Cryptocurrency revenue fell from 30-35% to 5% of the company’s total since 2021.
Crypto has reached a milestone in its institutional adoption journey that most in the space would be happy to sidetrack.
“This is the first real quarter where you’re hearing these companies actively mention crypto as a reason for lost revenue,” said Griffin McShane, head of information and communications at MPCH Labs.
But crypto companies had to intertwine with other tech companies for this revenue shortfall to occur in the first place.
In the crypto winter of 2018, Google was excessive earnings expectations, regardless of whether crypto companies were buying ads. But as venture capital and talented young coders created hype around the potential of blockchain, the rest of the tech economy had no choice but to switch to cryptocurrencies. In 2022, the prices of cryptocurrencies and technology tend to move in tandem.
“If you are running a company focused on profits [tech] operation, you have to support blockchain and digital assets, because it looks like that is where we are headed,” said David Tawil, CEO of ProChain Capital.
Crypto’s move to the mainstream has been fragmented and beset by unimpressive trading returns in 2022. Bitcoin mining, the original integration of crypto technology, was Monday 80% less profitable compared to a year ago.
But tech companies appear to be heading in the direction of cryptocurrencies, revenue headaches notwithstanding. Goal Y Reddit are integrating NFT into their platforms. Google Cloud is launch of new alliances with the Ethereum and Solana communities.
Companies further away from Web3 development are likely to be less affected by the rise and fall of cryptocurrencies. Caterpillar, for example, hasn’t shown much desire to move its manufacturing to the blockchain, and metaverse real estate doesn’t need heavy equipment to build.
But in the technology sector, a world where every company sees itself in part as a cryptocurrency company may not be that far off.
“In many ways, I think we’re already there,” McShane said.
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