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Cryptocurrency market crash halts commercial transactions with sports companies

Bitcoin News > Cryptocurrency market crash halts commercial transactions with sports companies

The current downtrend of the cryptocurrency market has negatively affected financial institutions, especially those dealing with digital currencies.

Now, some carriers are starting to feel the heat from a different angle. This concerns sponsorship deals between these digital currency companies and sports teams. This is especially so for crypto companies that have spent hundreds of millions of dollars on this issue.

Crypto winter goes on as usual

As of 2021, it is reported that many crypto companies have invested billions of dollars in sports sponsorship. These companies believed that the same thing would happen in 2022, only to wake up the downturn of the crypto market.

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As crypto winter rolls around, there have been records of losses for several crypto companies. This led them to make some tough decisions, such as cutting costs and headcount. Furthermore, companies that venture into heavyweight sports deals are looking to keep their operations afloat. As such, it is necessary to cut costs.

Follow report, the digital currency exchange, FTX, has withdrawn its issue of providing a jersey patch for MLB’s Los Angeles Angels. This happened the past few weeks, which saw the digital currency market drop. However, from the news, FTX spent $135 million in March 2020 to rename the Miami Heat’s home ground.

Sources cited another example of a nixed deal due to the crypto market crash. This involves a patched agreement between a crypto company and the NBA’s Washington Wizards. Many crypto companies consider the Washington Wizards patch desirable.

This is because the governing bodies and politicians who oversee their games are more often involved. However, there was no response from the parties (Washington Wizards and FTX).

Past sponsorships

Going further, Joe Favorito, professor of athletics at Columbia University, commented on the situation. From his keynote, there will be no announcements about sports partnerships or sponsorships until the bulls take over the market.

Furthermore, it is revealed that a large amount of money has been poured into funding trades during the past bull market trend.

Some examples of crypto companies cited are Crypto.com, FTX, and Tezos. For example, sources note that Crypto.com has offered around $700 million to name the home of the Los Angeles Lakers for nearly 20 years. Furthermore, in March 2021, FTX offered $135 million, as stated earlier. This is intended to replace the Miami Heat’s home stadium name with FTX Arena.

Cryptocurrency market down 3% on daily chart | Source: Total Cryptocurrency Market Cap on TradingView.com

Moving to Tezos, the company provided $27 million annually to maintain the Manchester United uniform logo. However, current market trends do not alter transactions between NFT companies and real-world products. This means that there are still certain benefits for the parties involved.

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One example is Budweiser, a Golden brewer in partnership with Zed Run, a popular horse racing platform. Another source example is Tom Brady’s Autograph NFT marketplace in partnership with ESPN. Again, the idea was to develop significant content for the sports television network.

Featured image from Pexels, chart from TradingView.com

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Teja
Teja
I am passionate about journalism and using new technology to spread news. I am also interested in politics and economics, and I am always looking for ways to make a difference in the world. I am the CEO of Janaseva News, and I am 24 years old.
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