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Is crypto making a sports sponsorship comeback?

The cryptocurrency market, once reeling from a dramatic collapse, is making a cautious comeback in the world of sports sponsorships. Teams, particularly those outside the elite, are increasingly open to these partnerships, driven by a combination of market recovery and the need for additional revenue streams.

However, the return of crypto sponsorships is not without its challenges. Price volatility, reputational risks, and the complexities of due diligence remain significant hurdles. Teams are now prioritizing strong contractual protections and clear communication with fans to mitigate these risks. “I think, really, the main reputational risk is that clubs or any rights holder that enter into these deals don’t clearly communicate what the product is that their partner is marketing through the relationship,” Daniel Haddad (Octagon) says.

One notable trend is the emergence of established brands like Crypto.com and Coinbase, which have successfully navigated the market downturn and are actively seeking new partnerships. This offers teams a greater sense of security and stability compared to the more speculative ventures of the past.

While large-scale spending is unlikely to return to the levels seen before the crash, crypto sponsorships are expected to play a more prominent role in the sports landscape. Shorter-term deals and partnerships at lower tiers of the market are becoming increasingly common.

Nascar's recent partnership with esports company Blast is a prime example of this trend. By sponsoring esports events, Nascar is actively seeking to attract younger audiences and expand its reach beyond traditional racing fans.

As the cryptocurrency market continues to evolve, it remains to be seen how long-term the resurgence of crypto sponsorships will be. However, it is clear that this trend is here to stay, albeit with a more cautious and strategic approach.

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