As more than $200 billion of the cryptocurrency market was sold off in a day, the sports world could be bracing for the repercussions.
Crypto exchanges like Crypto.com, FTX and Coinbase have made a slough of deals with major sports leagues and teams over the last several months. Those same exchanges — which take a percentage of each trade — have seen their cuts of each transaction tank as the value of Bitcoin, Ethereum and other cryptocurrencies have dipped dramatically.
“I am not worried about it in the big picture,” said Josh Olin, a veteran crypto trader and fraud expert. “The question is what kind of a winter is this? Is it a two month-winter or is it a two-year winter?”
Olin said major exchanges are capitalized enough to weather this downturn as Bitcoin and Ether have each fallen about 40% since the end of March. Bitcoin, which had an all-time high of $65,000 in February 2021, traded for about $28,0000 on Thursday, while Ethereum sat at around $1,900.
The volatility doesn’t appear likely to impact any of the current deals in the sports that include:
- Crypto.com signed a 20-year deal reportedly worth $700 million to take over the naming rights of Los Angeles’ Staples Center in November. The company also agreed to a 10-year, $175 million deal with UFC and a five-year, $100 million partnership with Formula 1 last year.
- FTX agreed to a 19-year, $135 million pact in March 2021 for the naming rights to the Miami Heat’s arena.
- Last October, Coinbase inked a multiyear deal to become the exclusive cryptocurrency exchange of the NBA, WNBA and NBA G League.
- The Dallas Cowboys became the first NFL team with a crypto partnership last month via a deal with Blockchain.com.
“Crypto.com remains fully committed to its sports sponsorships,” a spokesperson for Crypto.com told Front Office Sports in an email. “We are well-financed, and these are multiyear contracts, which will continue to play a crucial role in our mission to accelerate the world’s transition to cryptocurrency.”
There are some fears there could, however, be a slowdown on future deals if the valuations of other major exchanges slide.
Coinbase and FTX did not provide comment to FOS.
Dallas Mavericks owner Mark Cuban, however, doesn’t seem to be too concerned about the future of crypto, comparing the upheaval to the tech bubble crash two decades ago.
“Crypto is going through the lull that the internet went through,” Cuban tweeted on Monday.
That crash took out several companies that placed ads for Super Bowl XXXIV in January 2000. Many of those companies — including Epidemic.com and Pets.com — shuttered later that year.
FTX and Coinbase each had ads run during Super Bowl LIV, during which NBC charged $6.5 million per each 30-second slot.
