Facebook is really making a lot of changes on its platform, all in the name of “caring for its users as a friend would”. Most recently, Techzim wrote on how Facebook’s News Feed algorithm changes would negatively affect both individuals and businesses alike.
Now, Facebook has announced a new policy that “prohibits ads that promote financial products and services that are frequently associated with misleading or deceptive promotional practices, such as binary options, initial coin offerings and cryptocurrency”.
For cryptos, particularly Bitcoin, this is really not the best time for reputable platforms such as Facebook to be making such announcements. In the past two months, the value of cryptos especially Bitcoin has been on the decline (mostly). Therefore, this announcement will negatively affect the trust that people have in cryptos, hence lowering the demand for them. Ultimately, as market economics would have it, the value of the cryptocurrencies will also lower as a result.
However, Facebook said that the move is not a reflection of what they think about cryptos and their legitimacy but rather, on how they are being used to manipulate and deceive people. This is because most people do not fully understand cryptos, let alone initial coin offerings (ICO) and therefore are gullible to ads which talk about such.
But then again, people might not care about all this detail and just go with “Facebook banned crypto ads” and therefore lose trust in them. It doesn’t help the situation considering that the Facebook announcement comes after Stripe, one of the biggest payment platforms announced that they would be dropping Bitcoin as a payment option.
Nonetheless, this does not only impact the users, advertisers or cryptos but Facebook itself. Facebook’s revenue generation will be affected especially if we consider how intense the craze for cryptos is. Not too sure though on how big a percentage cryptocurrency ads or any of the other prohibited ads contributed to their revenue, it might be marginal after all.