Cryptocurrency market participants are now finding it increasingly difficult to ink new multi-million dollar partnership deals with top sports brands in the United States as compared to 2021, due to the ongoing crypto market downturn. The crypto winter of 2022 has forced many bitcoin (BTC)-linked businesses to significantly slash their workforce or end operations entirely, reports the NY Post on June 21, 2022.
No Fresh Sponsorship Deals
Indeed, impossible means nothing in the cryptospace. While the combined market cap of the global crypto market was sitting comfortably around the $3 trillion areas in November 2021, with many analysts predicted that the $69k bitcoin ATH was just a stepping stone that would catapult the orange coin to the $100k region or higher, 2022 has completely dashed those hopes, as many many crypto market participants are now fighting for survival.
In the latest development, some cryptocurrency exchanges that previously signed mega sponsorship deals with top sports franchises in the U.S. are now looking to cut costs due to unfavorable market conditions.
Per sources close to the matter, Sam Bankman-Fried’s FTX cryptocurrency exchange recently pulled out of a deal to put its name on the jersey of the American Major League Baseball team, Los Angeles Angels.
It will be recalled that FTX signed a 19-year partnership agreement worth $135 million with the Miami Heat team in April 2021, making it the exclusive cryptocurrency exchange partner of the basketball club.
Sources say another jersey patch deal between a cryptocurrency company and the NBA’s Washington Wizards also broke down recently. While the Washington deal would have served as a good publicity stunt for the crypto business in question, since the regulators also attend the games, the tumbling price of bitcoin and altcoin has made it impossible for the company to execute the deal.
Commenting on the matter, Joe Favorito, Columbia University’s sports management professor said that the possibility of crypto-linked signing fat sponsorship deals in 2022 is almost nonexistent due to gloomy market conditions.
“What money hasn’t been spent already you’re going to see curtailed – just like we saw during the dot-com bubble.”
A Match Made in Heaven
While the bull market of 2021 lasted, crypto firms pumped in staggering amounts of dollars into sponsorship deals. Though those spendings may have made it more difficult for some of these innovators to weather the storms of the current bear market, it has no doubt helped put bitcoin and other cryptocurrencies in the consciousness of more people across the world.
Earlier in February 2022, Coinbase, the largest cryptocurrency exchange in the U.S. and other major bitcoin trading venues shelled out millions of dollars to secure ad spots during the Super Bowl main event between the Los Angeles Rams and Cincinnati Bengals.
Fast forward to June 2022, and Coinbase announced the sacking of a massive 1,100 employees, barely 24 hours after airing another TV ad worth millions of dollars during the NBA finals.
At press time, the bitcoin (BTC) price is hovering around $21,227, according to CoinMarketCap.