Crypto.com spent $700 million to buy the rights to rename Los Angeles’ Staples Centre, as cryptocurrency exchanges expand into sports partnerships to acquire new clients.
Some background: Aside from the unfortunate fact that ‘Crypto.com Arena’ is possibly the worst name for any sports venue ever, this is a big deal.
There’s a reason why crypto businesses are snapping up arena naming rights and sports sponsorships (FTX purchased the naming rights for the home of the Miami Heat earlier this year) like there’s no tomorrow.
In the past year, Crypto.com purchased UFC fight night rights for $175 million, a Formula 1 sponsorship for $100 million, and a Philadelphia 76ers jersey sponsorship for $10 million.
- And they’re not alone. Coinbase announced last month that they’ve signed a multi-year agreement to become the NBA’s first ever cryptocurrency partner.
Why it’s happening: It’s all part of a bigger strategy to acquire as many users as possible before their competitors. Only 21 million Americans own crypto currency (13% of the total population). To bring more mainstream customers onto their platforms, exchanges are using sports as a bridge to new audiences.
Why it matters: The willingness of major sports franchises to do business with cryptocurrency exchanges is another example of how mainstream the industry has become. If successful, these splashy partnerships should bring millions more into market and spark greater adoption.
- For investors: FTX and Crypto.com both have tokens and Coinbase is publicly traded, so if you believe that their sports strategy will significantly grow their user base, you do have the opportunity to capture some of that upside.