The growth reflects the increasing interest in cryptocurrencies.
The digital currency craze is leading to a slew of new media companies that aim to win market share as interest in cryptocurrencies grows. According to a recent report by U.S. crypto exchange Gemini, 14% of the population owns cryptocurrencies such as bitcoin and Ethereum. The report further found that 13% of respondents intend to purchase digital assets in the next year. Online searches for information about crypto are also on the rise. This is creating an opportunity for media companies to generate more ad revenue.
Blockworks, which was founded in 2018, is a crypto media company that is catering to investors. Co-founder Jason Yanowitz told Be in crypto that the company anticipates up to $8 million to $10 million in revenue this year, a threefold increase from last year. It also plans to double in staff to nearly 40 from 17 by the end of 2021. The majority of new hires will contribute to the content side of its business, Yanowitz said.
The New York-based company focuses on editorial content, including a daily newsletter and podcasts as well as a series of conferences. Its two-dozen strategic advertising partners include Fidelity Digital Assets, Coinbase, CME Group, Fireblocks and BlockFi.
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CoinDesk, which started as a crypto information business in 2013, makes a profit selling ads and custom reports, according to Axios.
"As the community increasingly looked to us for the latest industry developments and our perspective on them, building a media business around that based also on data and events felt very organic,'' founder and investor Shakil Khan told Axios.
A 25-person editorial staff oversees news traffic, which has grown to 5 million monthly unique visitors, CoinDesk CEO Kevin Worth said.
Just as news exchanges emerged in previous cycles of crypto, the current cycle is seeing several media firms emerge, all with the goal of "trying to win mindshare in a young market," Mike McCaffrey, CEO of The Block, a media startup focused on cryptocurrencies, said.
McCaffrey told Axios that firms are testing new business models with "tokenomics," the study of how cryptocurrencies work, in an attempt to "align interests of readers and creators, subscriptions and ad revenue sources."
The risk these media companies faced for a long time was that the crypto market could dissolve at any time. But with the growth in ownership of cryptocurrencies, that doesn't seem likely to happen soon.
In the meantime, crypto media firms have to contend with running a new business in an events industry largely depleted by the pandemic. While virtual events still exist, the revenue from ticket sales and sponsorships is not nearly as significant, industry observers said.
Crypto media companies also have to compete with social media platforms that have consumed most of the ad revenue that used to flow to news companies. Ben Schiller, a managing editor at CoinDesk, told Fortune that crypto media firms have to compete with these platforms not only for money but for clout and attention.
Like in the mainstream tech industry, many of the influential crypto leaders typically turn to platforms like Twitter and Medium to get their message out, rather than use media outlets as intermediaries, Schiller said.
One thing they don't have to worry about in the short term is market growth. The market valuation for cryptocurrency is projected to cross $1.8 billion by 2027, according to Global Market Insights. The growing demand for digital assets and secure transactions is expected to contribute significantly to market growth, the firm said.
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