Crypto and sports betting on profit combinations to obtain fans

When Crypto.com stamped its name in the main portara of Los Angeles, said Kris Marszalek, head of the crypto exchange, the $ 700 million deal "the moment when cryptocurrencies..

The renaming of the home of the La Lakers National Basketball Association team in November opened the locks for a number of multimillion dollar marketing deals and partnerships between digital asset companies with cash and sports franchises that can deliver millions of potential customers.

competing stock exchanges Coinbase, Crypto.com and FTX bought Super Bowl ads this year, which allegedly cost $ 7 million for just 30 seconds. The home of the NBA team Miami Heat is now the FTX Arena-part of a 19-year deal for the stock exchange led by Sam Bankman-Fried, and Coinbase became a "exclusive cryptocurrency platform partner" for the NBA and WNBA in October.

"It is almost like buying real estate in California," said Haider Rafique, Chief Marketing Officer at OKX, a crypto exchange that recently signed a sponsorship contract with the Premier League club Manchester City FC. He said the rush for "overpriced" sponsorships came because crypto companies had a lot of money to burn, "or at least everyone at the top of the market last year".

Six months after the coup from Crypto.com in Los Angeles, the exuberance in the markets for virtual assets decreased. The deal almost came to the top of the crypto prices last year. An investor, the Bitcoin, the greatest cryptocurrency, would have bought almost half of his money on the same day as the business.

Nevertheless, the love relationship between sport and crypto seems to fit together perfectly, since franchise companies can reach a wider audience within the demographic group that want to reach digital asset players. "It is a way to really achieve your target groups. The traditional sports observer can be synchronized very well with the crypto holder or the mainstream early adopter," said Shailesh Lakhani, Managing Director at Sequoia Capital in India.

Crypto.com, which concluded a World Cup sponsorship contract with FIFA in March, said that the stock exchange user base had grown from 10 million in February 2021 to more than 50 million.

Lou Kovacs, President of Marketing in North America at the Octagon advertising and talent agency, estimates that marketing editions of crypto companies for sports sponsoring rose from $ 25 to $ 50 million to more than $ 600 million in the past year-without television advertising.

The rash of marketing has brought into consideration among supervisory authorities and consumer groups that inexperienced investors could be encouraged to put their money in digital brands that they do not understand. "A lot of intellectual calories are needed to understand them [Crypto]," said Quentin Thom, co-manager of the crypto-due-diligence company Perform Due Diligence Services.

Thom compared the wave of crypto marketing with previous advertising campaigns from now controversial industries. "It is the cigarette boom again. They have millions of fans who will use crypto, and [A Sports franchise] could ultimately take the risk of reputation to be associated with bad actors, but there is also a financial risk for all of their fans," he said.

The Spanish football star Andrés Iniesta was caught by the country's regulatory authority last year after taking part in a paid influencer campaign for the Krypto exchange Binance together with three other footballers.

The US boxer Floyd Mayweather, the NBA Hall of Famer Paul Pierce and the social media influencer Kim Kardashian were mentioned in a lawsuit in January in which they claimed that they had contributed to increasing the price of the tokens EthereMax as part of a program that enriched its supporters at the expense. The supporters of the token deny the claims.

As part of the broader turn to crypto-related content, sports franchises also accepted fan tokens.

In December, the Advertising Standards Authority in the United Kingdom said that Arsenal FC from the Premier League has “irresponsible” advertisements for his token, which enables owners to take part in official club decisions, violated the marketing rules. The club said that he takes his responsibility in relation to advertising for fans "very seriously".

Rich Kleiman and basketball champion Kevin Durant, co-founder of the tech investment start-ups Thirty-Five Ventures, were early investors in Coinbase and expanded their relationship in December. Kleiman said that consumers and prominent supporters equally have the responsibility to carry out their Due Diligence in relation to threshold markets and products.

"If athletes approach this deal - and every deal - this is obviously new and foreign for many people to continue their education," he says. "There is no 'let me get in crypto, the cubes roll and hope that I will become a multimillionaire'."

Ronan Evain, Managing Director of Football Supporters Europe, a prominent fan group, pointed out the risks "of an unregulated financial product". He said that teams and players who support crypto assets are "considerably irresponsible" because such connections aim to "build the legitimacy of the product for an audience that is not necessarily familiar with it".

But Kleiman said that the current volatility on the cryptoma markets did not shake their confidence in the industry.

crypto.com said that "it continues to be fully committed to his sports sponsoring".

"We are well financed, and these are several years of contracts that will continue to play a decisive role in our mission to accelerate the global transition to cryptocurrency," added the company.

kovacs said that the strong increase in marketing expenses is typical of life cycles in other industries, such as during the Dotcom boom and the rise of fantasy and sports betting in the USA when companies that offer new products or services spend their advertising designs through mass production. Market industry like sports. After all, these marketing booms go into a "restriction" when companies pass from the creation of consciousness to a more targeted strategy, but Krypto has not yet reached this stage.

"I don't think we are seeing something like this at the moment," he said. "It could be driven by part of the decline [cryptocurrency], but it is more likely to be driven by.

Nevertheless, some sports teams still observe from the bank and are waiting to see whether Krypto will be a sustainable part of their industry.

"We don't believe that we have to be the first on the market," said an English prime minister football club. "Everyone is just nervous in the face of the sector because they are huge, valuable and unknown. We approach with caution."