Cryptocurrency NBA season is coming to an end
The Warriors have reportedly previously signed a sponsorship deal with FTX, a cryptocurrency exchange. reportedly worth 10 million dollars. Curry yourself earlier this year appeared in an advertisement for FTX, in which he repeatedly notes that he is not an expert in cryptography. And the industry was featured in commercials during the finals, including ads for Coinbase, another exchange that poked fun at cryptocurrency doubters by showing various tweets over the years saying “Crypto is dead” followed by the words “Long live cryptocurrency.”
But as the NBA season wrapped up this week and a post-season filled with cryptocurrency sponsorships, the crypto industry faced new challenges. The price of many cryptocurrencies has plummeted, with Bitcoin dropping just above $20,000 this week from its all-time high of $69,000 in November. Meanwhile, a wave of layoffs has swept across the sector to prepare for a possible protracted economic downturn. Now the optics of these transactions could change.
Any sports fan has been bombarded with crypto this year, including ads, arena name changes, jersey logos, and NFT offerings. But even by that standard, the NBA stands out. In the past year alone, cryptocurrency has climbed to second place in the NBA sponsorship sector from 43rd place, according to IEG., Sports partnership consulting. Cryptocurrency brands have spent more than $130 million on NBA sponsorships this season, compared to less than $2 million last season, according to the firm.
“The influx of spending is like nothing we have ever seen before. I was expecting it to be potentially a little more measured, but it just felt like a runaway train,” Peter Laatz, global managing director at IEG, told CNN Business. “They kind of sprayed money all over the place.”
Just five crypto companies, including Crypto.com, Coinbase, and FTX, are responsible for 92% of the industry spending that helped the NBA reach $1.6 billion in annual sponsorship fees this season, according to IEG. The firm described spending between companies as an “arms race”.
Then the market changed. On Tuesday, a day after Coinbase aired its “Long Live Crypto” commercial during Game 5, the startup announced it was laying off 1,100 people. In an email to employees, Coinbase CEO Brian Armstrong noted the possibility of a recession, which he said “could lead to another crypto winter and could last for an extended period.”
Coinbase said the ad was part of their ongoing deal with the NBA, as the firm signed a multi-year deal with the league in October to act as the exclusive partner for the NBA and WNBA cryptocurrency platform. “This commercial was part of a pre-packaged package we received with NBA sponsorship,” a company spokesman said.
Crypto.com, another cryptocurrency exchange, acquired the rights to the Los Angeles Lakers stadium name in November. The deal was reportedly worth $700 million. He also signed a multi-year contract to become the Philadelphia 76ers. official partner for T-shirt patches. Crypto.com announced this week that it is laying off 260 employees due to the downturn in the market.
The company said in a statement that it remains “focused on investing resources in products and engineering capabilities to develop world-class products, as well as our strategic sports partnerships, and believes they will continue to play a critical role in our mission to accelerate global development.” “. transition to cryptocurrency.
Binance, a rare crypto company currently being hired, recently seems to have taken on sponsorship deals that other startups have landed. AT job advertisementBinance CEO Changpeng Zhao said, “A few months ago, it was not easy to give up Super Bowl advertising, stadium naming rights, big sponsorship deals, but we did it.”
IEG’s Laatz said that “the only thing he can compare crypto sponsorship deals to is business spending during the dot-com bubble.” it all exploded and the deals stopped,” he said.
But as long as sponsorship checks keep rolling in, the NBA won’t feel the pain, Laatz said. “Teams… took that money over and over again,” he said. “Getting it for a couple of years is better than getting nothing.”
With or without the same number of sponsorship deals in the future, there are other ways to continue the close connection between the NBA and the larger crypto industry, including through NFTs, which are pieces of blockchain-related digital content, the underlying digital database. cryptocurrencies.
The NBA participates in the NFT market through NBA Top Shot, a League-focused NFT marketplace that allows fans to buy, sell, and trade basketball’s best moments, or “Moments.” Launched by Dapper Labs, Top Shot was released to the public in October 2020 and has major investors in the game including Michael Jordan and Kevin Durant.
