Among a near infinite number of interpretations and takeaways from last week’s U.S. election results, “the most important message,” Coinbase chief legal officer Paul Grewal told The New York Times, “is that crypto wins.”
President-elect Donald Trump has publicly supported digital currencies while incoming VP JD Vance owns more than $250,000 in Bitcoin, according to recent disclosures.
In recent years, scandals have marked the coverage of blockchain technology more than success stories. And yet, given incoming legislators, Crypto.com CEO Kris Marszalek said online that “the future of crypto has never looked brighter than today.” Bitcoin prices have rallied roughly 25% since Nov. 5, hitting multiple all-time highs. At more than $85,000, the price has risen 43% over the last month, topping 2021’s high point by more than 20%.
Before getting into what the surge means for uninvested sports fans, it’s worth understanding why blockchain believers are so excited.
While Vice President Kamala Harris also embraced crypto technology during her campaign, current SEC chairperson Gary Gensler has become known for strict oversight of the industry. Gensler’s SEC has brought 104 enforcement actions against digital asset providers through the end of last year, according to The Blockchain Association, costing its members $429 million in defensive litigation and even more in the court of public opinion.
“The rules have been extremely unclear,” founder of crypto media company Trustless Media Zack Guzman said in an interview. “There is this hope that good faith efforts can kind of come back to the forefront, where rules can be provided and companies can operate without a fear of just being shut down for operating in this gray area of trying to deliver upside to people.”
Beyond possible regulatory changes, crypto champions are well aware of the self-reinforcing benefits of positive momentum. Rising currency prices will bolster their war chests as companies look to build and promote new products that can bring additional support to their cause.
And that’s where sports comes in. NBA Top Shot’s rapid rise in 2021 surprised both sports and tech leaders, leading to several similar efforts and marketing tie-ups highlighting crypto’s potential. The ensuing crypto crash, marked particularly by FTX’s downfall, would then turn many fans off from the entire concept.
But the truth is, the collaborations never fully disappeared. Top Shot, and its NFL sibling, continue operating, iterating in search of new heights. Marketing deals continued too. The Lakers still play in Crypto.com Arena, while the Warriors just (quietly) announced a deal with a different trading platform, Coinbase. Amidst a legal battle with the SEC, Coinbase’s stock is up 85% over the last month.
Adam Davis, the managing director for North America at sports and entertainment marketing business Two Circles, said he expects more deals to continue if crypto can sustain its latest bull run. However, he added that it won’t be a repeat of last time. Sports properties are likely to ask newer crypto sponsors for assurances such as up-front payments. They might also limit themselves to proven players like the above companies that withstood crypto’s recent downturn.
“There might be other teams too—like, if you were a team that was affiliated with FTX—you might just say, never again, it doesn’t matter who it is, I’m never going to do it again,” Davis said. “But I think that’ll probably be the exception to the norm, just based off the revenue pressures that most teams outside of the NFL face.”
One of the most novel aspects of the last crypto-sports dalliance was the emergence of tokenized ownership offerings that promised to give fans a new level of control over their favorite teams. Regulatory concerns and a lack of enthusiasm diminished those efforts, though they still are around, too. English Championship soccer club Watford put 10% of itself up for sale this summer, with buyers able to use either crypto or traditional currency to get involved.
“We’re all just waiting and hoping for some good news that this thing that we deeply believe in will be validated and supported and invested in, literally and figuratively,” says Packrip Ewing (an online pseudonym), a longtime NFT collector currently working for crypto service company MoonPay after spending time at Top Shot maker Dapper Labs.
If fans do return to the fold, they’re likely to find an improved experience, thanks to quality-of-life changes made since the last “crypto summer.” Using a credit card for blockchain purchases is generally smoother, platforms are more easily accessible and the underlying infrastructure has become more stable. If sports does play host to more crypto speculation, it remains to be seen which niche of the industry draws the most attention. Possibilities span collectibles, video games, gambling, fan engagement and ticketing, among other potential areas ripe for innovation.
Returnees or newcomers will still probably be wise to remember the frustrations of the past as they prepare for any good times to come.
