• Value of crypto and blockchain investment in sports sponsorships now valued at US$605m.
  • The global market is expected to grow at a CAGR of 6% from 2021-2027.
  • Almost 50% of US sports fans have some familiarity with cryptocurrencies.

Cryptocurrency sponsorship deals are becoming almost ubiquitous in global sports as blockchain-based businesses seek exposure and legitimacy in a world dominated by well-known commercial brands.

The value of crypto and blockchain companies' investment in sports sponsorship skyrocketed an unfathomable 3,488% in one year, from 32 sponsorship deals in 2020 valued at US$16.86 million, to 188 in 2021 worth US$605 million, GlobalData reported.

Crypto exchanges and other blockchain-related businesses have been pouring millions into sponsorships as an avenue to acquire new customers, and bring the increasingly popular digital asset class into the mainstream.

And in a match made in heaven, sports leagues around the world have been quick to embrace the cryptoverse, as they seek additional revenue streams to stem pandemic-driven losses.

According to global data intelligence company Morning Consult, almost half of all US sports fans polled in a recent survey said they are familiar with cryptocurrency, compared to 39% of all US adults, and just 23% of non-sports fans. Highly engaged sports fans are even more familiar with crypto, as two thirds of self-proclaimed avid fans, as well as 72% of sports bettors, said they are abreast of digital currency.

Reports predict the global sports sponsorship market could grow with a compound annual growth rate (CAGR) of 6% from 2021 to 2027. Last year alone, insurance companies spent a combined US$895 million on sponsorships within sport, a GlobalData Sport report found.

According to Statista, Nike is the world's most valuable sports sponsor having invested more than US$600 million in sponsorship value in 2021. Adidas followed, with a value for sponsorships of nearly US$343 million.

Crypto sponsorships are still in their infancy. The first official deal signed between a company and a rights holder was in 2014 when US-based crypto payment company Bitpay sponsored ESPN events as one of the first recorded cryptocurrency marketing initiatives.

Just this week, the AFL announced a five-year A$25 million sponsorship deal with Crypto.com, which is a trading platform.

Crypto.com last year signed a record 20-year US$700 million deal for the naming rights to the Los Angeles arena home to the Lakers, Kings, and Sparks that was formerly known as the Staples Center. Last June, Formula 1 landed Crypto.com as a new sponsor in a five-year deal worth more than US$100 million.

Sports as a commercial industry has realised the potential that crypto and blockchain technologies can bring to further monetise fan engagement, attract sponsorship deals, and broaden its appeal globally.

A part of that recognition has been the advent of fan tokens (FTs), which allow its holders exclusive access to sports content, a closer association with their team, as well as monetary rewards. These tokens are a form of digital coin and require making use of blockchain technology from a third party.

Whichever way you look at it, both the sports industry and cryptoverse seem to be kicking goals by teaming up.