When the Fifa World Cup opened in Qatar in late 2022, very few were surprised to see Crypto.com and Algorand emblazoned on the hoardings festooning the football pitch. Backtrack a decade back, and it would have been odd. Now, years after the wave of aggressive marketing by tobacco companies, airlines, betting sites, and others, it is apparently time for crypto.
In the last four years, crypto companies have been forging dynamic partnerships with sports teams, harnessing the tremendous power of their respective communities. The idea is to not only yield individual benefits but also make significant contributions to the flourishing growth of both the cryptocurrency industry and the world of sports.
Oftentimes, many downplay the role of community as a key strength of the cryptocurrency ecosystem. Many crypto users and antagonists often concentrate on the profitability and privacy of cryptocurrencies as their core strengths. But they forget that these qualities only matter because there is a global community of believers who have faith in crypto's potential to usher them into a whole new world of financial freedom.
Communities are so integral to cryptocurrencies that even without much effort, crypto companies find themselves being pulled towards community-based industries such as sports. In recent years, it has become increasingly common to see cryptocurrency companies actively sponsoring sports teams or even events. In fact, one of the major highlights of the cryptoverse in 2022 was the number of crypto companies that placed ads during the Super Bowl. There were even analyses that ranked the qualities of these ads.
So one might wonder why this affinity between crypto companies and sports. But before delving into the reasons, it's important to explore the dynamics that control the relationship between the two industries.
Then vs Now: The Crypto-Sports Scorecard
Crypto companies have not always teamed up with sports teams for obvious reasons. Five to ten years ago, cryptocurrencies were still relatively new, and their adoption and understanding were limited to a smaller tech-savvy community. As a result, the involvement of cryptocurrency companies in sports sponsorships was limited, and partnerships were less common.
During that period, most crypto companies focused on building and establishing their platforms, infrastructure, and user base. Generally, the awareness and acceptance of cryptocurrencies were low, thus the appeal and potential benefits of sports sponsorships were not as apparent.
But there were a few crypto companies or projects that attempted to play with sports sponsorship. For instance, in 2014, the Dogecoin community raised $55,000 (about 67 million Dogecoins) to sponsor Nascar driver, Josh Wise. Prior to that, the community had sponsored the Jamaican bobsleigh team to the Winter Olympics in Sochi. They raised over $25,000 in Dogecoin for the team.
These sponsorships were among the few cases of cryptocurrency companies exploring sponsorships during the early days of cryptocurrencies. However, with the traction Bitcoin and other cryptocurrencies have gotten in recent years, partnerships between crypto companies and sports teams have become widespread.
…And the Stats Prove This
As of 2022, crypto firms have spent over $2 billion on sports advertising or sponsorships of major sports institutions including the NBA, Major League Baseball, Formula 1, and even the Drone Racing League. This means that crypto companies scooped a significant chunk of the global sports sponsorship market estimated at $64.8 billion as of 2021. In fact, it is projected that crypto-sports sponsorships could hit $5 billion by 2026.
Now, the big question is why are crypto companies so invested in sports? Why these sponsorships?
Sports Sponsorships by Crypto Companies: The Goals
As mentioned earlier, cryptocurrency is a community-driven industry. Therefore, the goals of crypto companies partnering with sports teams hinge on taking advantage of the sports community and/or expanding an existing crypto community. These goals can be broken down into three: (1) increasing brand visibility, (2) targeting new demographics, and (3) promoting innovation.
Increasing Brand Visibility
For cryptocurrency companies, sports sponsorship is a powerful tool to enhance brand visibility. By associating themselves with popular sports teams, these companies can tap into the vast fan base of the teams. Sports sponsorships offer exposure to millions of fans through broadcasts, merchandise, events, and social media, thereby heightening the company's recognition both within and beyond the cryptocurrency community.
An example of this is Crypto.com's sponsorship of Aston Martin Cognizant Formula One Team. The sponsorship showcases the company's commitment to expanding its reach. As a sponsor, Crypto.com gains access to Formula One's global following, boosting its brand awareness considerably.
Targeting New Demographics
By sponsoring sports teams, cryptocurrency companies can reach audiences outside of their typical user base. Sports fans who may not be familiar with cryptocurrencies can be introduced to digital assets and their associated platforms. It is a strategy that paves the way for mainstream acceptance of cryptocurrencies.
This is what Choise.com set to achieve when it entered a sponsorship agreement with Vienna Vikings, one of Europe's most accomplished American football teams. By providing support to the team, Choise.com aims to promote cryptocurrency adoption among the global American football fanbase. Furthermore, the sponsorship will offer an avenue for the company to showcase its numerous crypto-banking solutions through which customers can purchase and earn cryptocurrency, leverage high-yield dual-currency investments, and profit from NFTs and Web3 staking.
Promoting Innovation and Technological Advancement
Cryptocurrencies are often associated with cutting-edge technology and innovation. In several instances, they even lead these innovations. Therefore, by sponsoring sports teams engaged in technological advancements, such as racing teams or e-sports organizations, cryptocurrency companies can strengthen the image of progress and innovation and leverage these partnerships to showcase their technological prowess.
This is what happened with FTX and Team SoloMid (TSM). Before the fall of FTX, the crypto exchange joined forces with TSM, one of the most successful esports organizations. The partnership fostered the exploration of blockchain technology in e-sports and attracted a tech-savvy community fascinated by both cryptocurrencies and gaming.
Final Words
The decision of cryptocurrency companies to sponsor sports teams goes beyond just financial considerations. It is a strategic move to increase brand visibility, target a broader audience, and align themselves with the image of technology and innovation. The case studies above show how this synergy benefits both the sports teams and the cryptocurrency companies.
As the world continues to explore the potential of cryptocurrencies, sports sponsorships offer a mutually beneficial opportunity for both industries to thrive and pave the way for future innovations.
