© Reuters. Crypto companies are trying to overcome the crisis by investing in sports sponsorships
- Despite the bear market of the last few months wiping out almost all the profits of digital asset trading firms, the bet is still on.
- The crypto industry is competing for multimillion-dollar investments in sports against traditional brands, including sportswear companies, soft drink companies, automakers and others.
- The companies aim to reach new audiences in the market and spread the use of cryptocurrencies among sports fans.
The bet on sports sponsorships by major global cryptocurrency trading companies continues despite the crypto winter that has evaporated around two-thirds of the market value of cryptocurrencies this year.
Since last year, crypto industry giants such as Binance, Coinbase (NASDAQ:), Crypto.com and FTX have launched an aggressive marketing strategy linked to sports. The aim is to try to match the investment made by other prestigious traditional brands in this sector.
In the past 18 months, investment in sports sponsorships by crypto companies amounted to more than 2.4 billion dollars, according to Bloomberg. It is a financial and logistical effort that they hope will have its juicy reward that will lead to the massification and growth of the market.
Crypto industry invades sports fields
The millionaire sports sponsorships have ceased to be exclusive to Adidas (OTC:), Nike (NYSE: ), Coca-Cola (NYSE: ), Mercedes Benz, or any other traditional brand. Now, crypto exchanges have also joined the competition for a piece of the giant sports pie as they look to increase their reach and popularity.
Whether in football, the NBA, Major League Baseball, Formula 1, or the Drone Racing League, the presence of digital asset trading companies is increasing after signing important sponsorship contracts with the leagues and professional sports teams around the world.
Following the premise that it is precisely during crises that one should invest the most in advertising, companies in the crypto industry have flooded sports venues, team jerseys and television spots with all kinds of allusions to their respective brands.
Opinion research suggests that mass sports fans now have twice as much exposure to cryptocurrencies and other digital assets as non-fans. Recovering from the financial downturn, winning new audiences and reopening their businesses, exchanges are on the way to becoming some of the biggest sponsors and advertisers in sports.
Million dollar sponsorship deals
The largest endorsement deal signed so far is with Crypto.com for $700 million. Last September, the company acquired the 20-year naming rights for the Los Angeles Memorial Sports Arena, home of the Lakers, Sparks and Kings, now called the Staples Center. Similarly, it ventured F1 sponsorships.
Another major sponsorship deal was signed by FTX with Miami-Dade County in May 2021 to acquire the naming rights of the American Airlines (NASDAQ:) Arena. The 19-year deal will allow the exchange to be an official sponsor of the venue that is home to the Miami Heat basketball team.
Binance has signed multi-million dollar deals with top soccer stars such as Cristiano Ronaldo and Africa Cup of Nations clubs. While Coinbase recently signed an advertising deal with the NBA and prominent basketball players such as Kevin Durant.
On the flip side
- Web3 promises to become the next big wave of the Internet and both the crypto industry and elite sports are taking advantage of these circumstances to ensure its sustainability and consolidate its presence.
Why you should care
- Sports leagues have discovered a new source of funding, while crypto companies use sports for market expansion.
You can read other news related to sports sponsorships by crypto companies in the following articles:
How to invest strategically in sports
Cryptocurrency Trading Enters South American Soccer
FTX works with sports teams
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