The recent partnership between crypto.com and the UFC is another step closer to the wider adoption and recognition of cryptocurrencies. The partnership will designate Crypto.com as the UFCs’ global fight kit partner, with Crypto.coms’ brand being featured on UFC fighter uniforms from the 10th of July 2021. This partnership is not the first one that we have seen between the sports industry and crypto exchanges. A few years ago, partnerships with crypto exchanges or cryptocurrencies would be mocked and were an order of magnitude smaller than `normal` sponsorship deals. However, times have changed, and every month new partnerships between established companies and cryptocurrency businesses are announced. These partnerships are strategic moves to increase brand recognition as crypto becomes mainstream.
It’s a race to be number one
The crypto space is a rapidly evolving and growing industry, with cryptocurrency exchanges constituting the most important vehicles for interacting and transacting with cryptocurrencies. Due to its importance, competition between exchanges aiming to capture a large market share has been intense. Partnering or sponsoring sports leagues and teams, affiliates receive valuable brand recognition in an area with many people who have not yet interacted with crypto. The partnership between Crypto.com and the UFC is an excellent example of Crypto.com looking to increase brand recognition and onboard new users from the UFC’s’ audience.
Similarly, FTX, another established and major cryptocurrency exchange, is trying to increase its US user base and market share and is in direct competition with Coinbase. Their most recent move, in a long list of strategic partnerships, is a partnership with Major League Baseball. Another notable strategic partnership was the purchase of the naming rights for the Miami Heat’s stadium.
Crypto.com has adopted a similar strategy to FTX, pursuing partnerships with sports teams and leagues. Outside their most recent partnership with the UFC, they have also partnered with F1 team Aston Martin (Formula One), with an additional $100 million partnership with the F1 league. Other notable sports partnerships orchestrated by Crypto.com were their sponsorship of the Montreal Canadiens, a National Hockey League team, and Italian soccer’s Coppa Italia final this year.
You can't put a price on heart ❤️
— UFC (@ufc) July 11, 2021
Why Sports and Crypto coupled up?
People are extremely passionate about sports and the teams they support, similar to the passion that exists in the growing cryptocurrency industry. Partnerships allow for a concurrent increase in high-quality market audience, which is mutually beneficial for both industries.
We believe that the key driver for numerous crypto and sports partnerships that have occurred this year are the restrictions arising from COVID-19, which have significantly affected the sports industry. Fans were no longer able to interact with their friends, family, fellow fans, sports teams, and players in the ways they had all their lives and were forced to go online to discuss the match. This had a significant impact on the business model and profitability of the sports industry. At the same time, crypto and NFTs were experiencing rapid growth due to their online nature, but were, and still are, in sore need of expanding their user base to reach mainstream adoption on the level of the sports industry.
Both industries realized that strategic partnerships would solve key issues and benefit both parties. The sports industry would take advantage of the online nature of cryptocurrencies to retain and increase fan engagement, whilst cryptocurrencies would see new users stemming the enormous audience of sports. These cross-industry partnerships have also led to joint innovations and new products. The NBA released Top Shot moments, an NFT platform where fans can collect highlights of their favorite players. FC Barcelona released a fan token provided by Chiliz, which would allow fans who owned the token to take part in polls and surveys regarding the club, whilst also having the chance to win exclusive merchandise and unique once-in-a-lifetime experiences. Recently, McLaren Racing and Red Bull Racing announced they would launch NFTs and build a fan engagement platform on blockchain around the NFTs.
All of these projects serve to find new ways of connecting fans with their teams, using cryptocurrencies to enable this, and it will be interesting to see the innovations that arise from these partnerships in the future.