Bored & Hungry NFT Theme Restaurant Still Accepts Crypto

Between 2020 and 2021, a cryptocurrency boom led to several cryptocurrency-oriented companies signing deals with sports organizations like the NBA and the UFC. One of the biggest deals was blockchain giant Crypto.com signing a $700 million deal with Staples Center, one of the world’s largest sports and entertainment venues, in Los Angeles. The Singapore-based company has also signed deals with the UFC and Formula 1 for promotion in various sports venues and on sports teams.

Crypto.com was not the only cryptocurrency company to expand its reach into sports or entertainment. In exchange for the naming rights to the Miami Heat arena for 19 years, FTX, a cryptocurrency derivatives exchange, paid $135 million. And in an exclusive deal, Coinbase became the exclusive cryptocurrency exchange for the WNBA, NBA, and NBA G League.

Heading into 2022, there was little warning that crypto winter was approaching.

Winter is here

In May, the main stablecoin TerraUSD lost its peg to the US dollar. In a single day, TerraUSD lost $60 billion in value. After that, major crypto lender Celsius suspended withdrawals, citing liquidity issues. The company continued with the declaration of bankruptcy.

They were among the first dominoes to fall in the crypto world, with many others soon falling. As a National Research Group (NRG) report on the state of the cryptocurrency industry noted, the market is down “more than 70% from the highs it reached in late 2021, with many of the most popular coins trading at less than half of where they were at the beginning of the year.

As the NRG report also notes, the crypto market has suffered “dramatic” corrections before. Is the current crypto winter that different? And more importantly, will the crypto winter put a freeze on the budding love affair between entertainment, professional sports, and cryptocurrencies?

According to NRG, the “crypto winter” has affected the public view of cryptocurrencies in various ways.

For example, NRG reports that “70% of consumers feel they have at least a ‘moderate’ understanding of cryptocurrencies.” If correct, that’s a notable change from a June 2021 YouGov poll that found 69% of Americans agreed with the statement, “I don’t really understand cryptocurrencies.”

On the other hand, at least 61% of people surveyed said they were aware of “crypto lockdown” or “crypto winter.” It appears that the strong and negative news coverage of the crypto winter over the past three months has greatly increased consumer awareness of the market crash.

NRG notes: “This is no longer a technological novelty; more and more, having some understanding of cryptocurrencies and how it works is seen as an element of basic financial education.”

Even though consumers have been exposed to a lot of cryptocurrency news, NRG reports that few bother to do any deeper research. Bitcoin is still the household name, and consumer awareness of other coins like ETH, Dogecoin, or even the popular Shiba Inu meme coin hasn’t increased much since early 2022. Even with the media attention to TerraUSD’s decoupling since the dollar (arguably one of the biggest crypto events in recent memory), only 7% of consumers are familiar with the term “stablecoin”.

Crypto Sponsorships Continue…Mostly

Al D’Agostino of Crypto.com gave a succinct response to dot.LA when reached out for further comment on the company’s partnership with the Staples Center: “Crypto.com remains fully committed to its sports sponsorships. We are well funded and these are multi-year contracts, which will continue to play a crucial role in our mission to accelerate the global transition to cryptocurrency.”

While the New York Post reported in late June that FTX had pulled out of sponsorship negotiations with the Los Angeles Angels, the crypto exchange has taken on new sponsorship obligations with a $210 million name deal for the esports team. TSM professionals, also known as Team SoloMid.

But as recently as August 2, cryptocurrency exchange Voyager pulled out of a multi-year sponsorship deal with the US National Women’s Soccer League (NWSL). Furthermore, the exchange is facing bankruptcy after its CEO made millions at the peak of the cryptocurrency boom in 2021.

In comments accompanying his crypto winter report, NRG Global Director of Insights Marlon Cumberbatch said that “the collapse of crypto hasn’t done much to dampen Americans’ enthusiasm for crypto; for investors, the recent collapse is just the latest in a long series. of ups and downs, rather than the beginning of a terminal decline.

Cumberbatch also offered advice on how companies as large as professional sports teams and small as local businesses could strategize to survive the crypto winter. “Start engaging openly and constructively with policymakers,” Cumberbatch said, “continue to invest in educating consumers about the technology and promote use cases for cryptocurrencies…”

Cumberbatch also encouraged better cryptocurrency education for all. From the C-suite to the penny cryptocurrency investor on the street, people need to better understand what they are getting into. “Recent media coverage has done a lot to increase consumer awareness of cryptocurrencies,” he said, “it is not the same as increasing understanding. It is critical that consumers know enough about the technology to be able to make informed decisions and protect themselves. of unnecessary risks. .”

Cumberbatch did not immediately respond after dot.LA requested specific comment on crypto company sponsorships, such as the Crypto.com and Staples Center deal.

Where do we go from here?

NRG’s report on the overall state of cryptocurrencies did not predict doom and gloom, but noted that the cryptocurrency landscape “is vast, complex and constantly changing.”

“More than anything else,” the report continued, “recent events in the crypto market have made it clear that there is a need to educate potential investors. Before they buy, it is vital that consumers understand the technology in more than just a surface. level, and who know enough about crypto to be able to make informed decisions and protect themselves from unnecessary risk. And today’s top crypto companies will have a critical role to play in facilitating that educational journey.”

Cryptocurrency exchanges have benefited more from their sponsorships than from sponsored organizations and, if nothing else, the crypto winter has put a dent in more multi-million dollar deals by now. But if the National Research Group report proves prophetic, this may be a temporary pause in crypto-oriented companies that pay big bucks for widespread name recognition. Crypto.com arena is here to stay… for now. If the crypto winter gives way to a crypto spring, we could soon see more Coinbase stadiums and Bored Ape Yacht Club restaurants.

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