Are crypto companies sponsoring F1 for the glitz and glamor, or will NFTs demonstrate important use cases be
Are crypto companies sponsoring F1 for the glitz and glamor, or will NFTs demonstrate important use cases behind these partnerships?
The cryptocurrency community has always put an emphasis on decentralization and globalization. Therefore, it shouldn’t come as a surprise that a number of crypto companies are sponsoring Formula 1 (F1) racing teams in an attempt to further connect with audiences across the world.
Research by global analytics company Nielsen Sports found that Formula 1 has the potential to reach about one billion fans globally this year, with the 16–35 age group accounting for the biggest share. The appeal of F1 is clearly on the rise, and cryptocurrency companies are jumping on board to demonstrate their presence. To put this in perspective, there are 10 F1 teams for the 2022 season and crypto companies are currently sponsoring eight.
Crypto and F1: An ideal marketing match
Mark DiMassimo, founder and creative chief of DiGo — a New York-based marketing agency — told Cointelegraph that the interest crypto companies are taking in Formula 1 certainly makes sense from a marketing perspective. “You can argue that F1 is a natural extension from a sponsorship standpoint for crypto companies since both sectors are international, exciting and involve money,” he said.
To DiMassimo’s point, the F1 racing team, Red Bull Racing, recently entered a three-year partnership with Singapore-based crypto trading platform Bybit for $50 million per year. Prior to this, the cryptocurrency exchange Crypto.com announced a $100 million partnership with Formula 1 for its 2021 “Sprint Series.”
Igneus Terrenus, head of communications at Bybit, told Cointelegraph that the crypto exchange views sports sponsorships as a key part of its global marketing strategy to build brand awareness and sentiment in major markets. “We are also partners to some of the top e-sports teams in the world, but Formula 1 remains the most popular international racing series,” said Terrenus. He added that Formula 1 has a larger and more global following than almost every other sport:
“2021’s Abu Dhabi GP culminated in a dramatic nail-biting final-lap decider that saw Red Bull Racing’s Max Verstappen prevail over Mercedes’ Lewis Hamilton — this attracted an audience of 108 million. Whereas Super Bowl 2022 between the Rams and Bengals drew an audience of 101 million.”
Patrick Hillman, chief communications officer at Binance, told Cointelegraph that F1 is a sport the crypto industry gravitates toward, given its global presence and fan base. “Binance recently announced a partnership with the BWT Apline F1 Team. There are very few sports as global as F1,” he said.
Blockchain companies are also getting involved with Formula 1. In January 2022, Fantom Foundation, a layer-one blockchain platform, announced its sponsorship with the Italian Formula 1 racing team, Scuderia Alpha Tauri. Fantom CEO Michael Kong told Cointelegraph that this partnership is important for several reasons, with exposure being a primary benefit. “It puts a lot more eyeballs on Fantom since F1 is watched by hundreds of millions worldwide. “This has partly been responsible for user growth on the Fantom network,” he said.
F1 sponsorships expand as NFTs gain traction
But, while crypto companies may have initially been drawn to F1 sponsorships from a marketing perspective, the rise of nonfungible tokens (NFTs) is presenting new opportunities for organizations involved with Formula 1. For instance, a recent Deloitte Global study anticipated that in 2022 alone, sports NFTs will generate more than $2 billion in transactions — double the volume seen in 2021.
Additionally, the study predicts that by the end of this year, roughly five million sports fans around the globe will own an NFT sports collectible. Given this, the majority of crypto and blockchain companies sponsoring Formula 1 racing teams have also launched NFTs to coincide with sponsorships.
On March 22, 2022, Fantom announced a sponsorship with the Brazilian-American Formula 1 racing drivers Pietro and Enzo Fittipaldi. According to Kong, the duo drivers will display Fantom imagery on their race suits and helmets throughout the F1 2022 season. In addition to the sponsorship agreement, the Fittipaldi Brothers will launch their first NFT series on the Fantom network. “Both Pietro and Enzo have demonstrated a strong interest in emerging technologies. These NFTs will deliver unprecedented access to fans, allowing them to engage with the popular athletes through a new medium,” Kong said.
Pietro Fittipaldi further told Cointelegraph that he and his brother decided to launch an NFT series with Fantom due to their involvement in the crypto world:
“We wanted to be able to share some of our most exclusive items with our…
cointelegraph.com