Crypto sports sponsorships are heating up again with multi-million dollar deals on the table
Crypto.comhas announced a second multi-million dollar sponsorship deal, this time with the Ultimate Fighting Championship (UFC).
- Other players in the crypto industry have also been stepping up their game and doling out money to establish their presence after this year’s bull run.
- The sports arena is the most popular choice with the overlap in demographics and users.
AdvertisementFlush with cash from this year’s bull run, crypto sponsorships are making headlines again.
Sources told CNBC that the deal is worth $175 million and will stand for the next ten years, which would make it the UFC’s largest sponsorship deal to date.
The brand will be getting its name out there by featuring on fight kit items — like shorts and hoodies worn by wrestlers when they enter the ring and the clothes worn by the training staff. And, it will also own the rights to UFC’s new sponsorship category dubbed ‘Cryptocurrency Platform Partner’.
According to UFC COO Lawrence Epstein, the deal is great for the company since it is looking to attract the younger crowd, many of whom are active in the crypto space. Crypto companies — not just crypto.com — know this and are looking to capitalise on the opportunity.
Cryptocurrencies are seeing faster adoption in sports than elsewhere
The concept of crypto sponsoring sports kicked off in December 2014, when BitPay signed a sponsorship deal with ESPN Events. They also signed on to sponsor the St.Petersburg Bowl. Bans on major advertising networks, like Facebook and Google, have forced cryptocurrency advertisers and publishers to adapt.
In addition to the UFC and Formula One, Crypto.com has multiple sporting team partnerships on its roster like the National Hockey League (NHL) team, the Canadiens, and the Aston Martin Racing Formula One team.
The Hong Kong-based crypto exchange FTX has also been active when it comes to sports partnerships. Last month, it became the first cryptocurrency exchange to sponsor a professional sports league — Major League Baseball (MLB) — in the US.
The company also struck a multi-year naming rights deal with esports organisation Team SoloMid worth $210 million and a 19-year deal with Miami-Dade County for the naming rights to NBA’s Miami Heat.
Similarly, Seattle-based cryptocurrency startup StormX just signed a sponsorship deal with NBA’s Portland Trail Blazers for an undisclosed amount. The basketball team’s jerseys will feature the company’s logo for the next five years, starting with the upcoming season.
Meanwhile, in India, it’s hard to miss the WazirX ads that have been playing throughout the Euro Cup 2021 streams. And the upcoming T20I India versus Sri Lanka series that kicks off on July 21 has been rebranded as the ‘The CoinDCX T20 Cup.’
It’s about more than just sponsorships — it’s about creating new use cases
Cryptocurrencies are being accepted as payments across at least a dozen sporting platforms. In most cases, the fans can buy tickets or purchase a collectible non-fungible token (NFT) with either Bitcoin or Ether.
However, examples have also started to emerge where the use of cryptocurrencies has been taken a step further. The American professional basketball team Sacramento Kings, for instance, is willing to pay players’ salaries and transfer fees in cryptocurrencies.
In another example, NASCAR driver Landon Cassill has signed an agreement with the cryptocurrency exchange Voyager to receive a fully cryptocurrency-backed compensation package. While the racer didn't reveal the amount, he did disclose that Voyager was paying the ‘market rate’ despite an unorthodox payment method.
The crypto industry is at a crossroads
Back in 2017, Bitcoin saw a similar bull run but the hype died down over time. Come 2021, the crypto industry is facing another moment of truth. The interest in cryptocurrencies has never been higher, but neither has the regulatory uncertainty.
In India, investment in blockchain-based digital assets like Bitcoin, Ethereum, and others grew from $200 million to nearly $40 billion over the space of one year. However, many banks backed out from allowing cryptocurrency transactions and crypto exchanges in India have been finding it difficult to partner with payment gateways.
AdvertisementSimilar trends can be seen around the world as well, starting with China’s bitcoin mining ban to regulatory issues for the world’s largest cryptocurrency exchange, Binance, in multiple countries.
Countries like South Korea, the US, South Africa and others are mulling over how to classify cryptocurrencies so that there can be some sort of check on money laundering and other illicit activities. Others, like El Salvador, are legalising Bitcoin in order to not be solely dependent on another country’s currency anymore — like the US dollar.
For the crypto industry, a lot of the pending decisions and new regulations will determine where the sector heads from here. It’s at a crossroad right now and companies like Crypto.com want to ensure that cryptocurrencies stay in the mainstream.
For a more in-depth discussion, come on over to Business Insider Cryptosphere — a forum where users can deep dive into all things crypto, engage in interesting discussions and stay ahead of the curve.
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