Crypto.com has invested nearly $1 billion in sports event sponsorship, and the marketing battle for crypto institutions has just begun
Crypto.com has invested nearly $1 billion in various sports event marketing.Author: Nianqing, Chain Catcher
Recently, one of Los Angeles' iconic buildings, the Staples Center, home of the Lakers, announced it will be renamed Crypto.com Arena this December. The venue will host a major sporting event on Christmas Day, where the Los Angeles Lakers will face off against the Brooklyn Nets at home.
To acquire the naming rights, the cryptocurrency exchange Crypto.com signed a 20-year contract worth $700 million.
This naming rights deal may be the largest in sports history. Previously, the largest naming deal in sports was a $500 million agreement reached in September this year between the Clippers and financial management technology company Intuit.
Crypto.com's massive billboard in Las Vegas
Why is Crypto.com able to spend so lavishly?
Founded in 2016 and headquartered in Hong Kong, Crypto.com currently has around 10 million users and a team of about 2,400 members, ranking 9th on the Coinmarketcap exchange leaderboard.
The project has no public financing records prior, but it issued its platform token CRO in 2018, which has increased nearly ninefold this year. Its diluted total market cap is $15.4 billion, with a circulating market cap of $12.9 billion, ranking 19th among all cryptocurrencies.
Crypto.com states its goal is to mainstream cryptocurrency and accelerate the world's transition to it. To achieve this, Crypto.com has chosen to penetrate more users through the sports sector, having invested nearly $1 billion in this area, with acquiring the naming rights to the Staples Center being the most significant step.
Crypto.com CEO Kris Marszalek said in an interview with Bloomberg, "If we had to choose a place to have naming rights, it would be the Staples Center in the cultural capital of the world."
Kris Marszalek indicated that this move aligns with Crypto.com's ambition to become a top brand, second only to Nike and Apple, in the coming years.
It is understood that the arena hosts over 240 events annually, including the Grammy Awards and Emmy Awards ceremonies, as well as games for NBA teams like the Lakers, Kings, and Clippers, attracting around 4 million visitors each year. According to reports, under the partnership agreement, Crypto.com will have approximately 3,300 square feet (about 307 square meters) of branding space at the arena entrance and will have a presence in the nearby LA Live entertainment complex.
A careful review of Crypto.com's partner list reveals a clear brand marketing strategy focused primarily on sports, supporting teams and leagues in basketball, hockey, soccer, mixed martial arts, and esports.
According to a poll by data analytics company Morning Consult, sports fans are twice as likely to be familiar with crypto assets compared to non-sports fans, and the number of those who are "very" familiar is three times higher. 47% of sports fans reported being familiar with crypto assets, while the figure for all American adults is 39%. One-third of self-identified "avid" sports fans and 72% of sports bettors stated they are familiar with crypto assets.
With a series of significant investments, in November this year, Crypto.com became the top free app in the US Google Play Store.
Additionally, data from CoinGecko shows that Crypto.com's daily trading volume has significantly increased since August, rising to between $2 billion and $5 billion in November, with an increase of at least tenfold, clearly surpassing the growth rates of exchanges like Coinbase, Binance, and Kraken during the same period.
The Marketing Battle Among Crypto Institutions
As the acceptance of cryptocurrency continues to rise in the US, crypto institutions are competing for visibility.
In addition to Crypto.com, several cryptocurrency trading platforms, including FTX and Coinbase, have invested heavily in marketing. In April, the cryptocurrency exchange FTX purchased the naming rights to the Miami Arena, home of the Heat, for $135 million over 19 years. In June, it signed a $210 million deal with global esports team TSM, acquiring some of its naming rights. Furthermore, advertisements for the famous American football event, the Super Bowl, scheduled for next February, have already been booked by them.
In October this year, Coinbase also announced it would become the official sponsor of the NBA, becoming the "exclusive crypto partner" for the NBA, WNBA, and NBA affiliated leagues.
Regarding these marketing expenditures, FTX founder and CEO Sam Bankman-Fried told Decrypt that FTX was lagging in visibility. He believes that if marketing had started earlier, more newcomers would have entered the market through FTX.
It is foreseeable that the marketing war in the crypto space has only just begun.
