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A cryptocurrency-heavy NBA season comes to an end

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The Warriors were said to have previously signed an endorsement deal with FTX, a cryptocurrency exchange, worth $10 million. Curry himself earlier this year appeared in a commercial for FTX, in which he repeatedly points out that he is not a crypto expert. And the industry appeared in commercials during the finals, including an ad from Coinbase, another exchange, mocking crypto doubters by showing different tweets over the years claiming that “crypto is dead,” followed by the words “Long live cryptocurrencies”.

But as an NBA season and postseason awash in crypto sponsorships came to an end this week, the crypto industry was facing new challenges. The price of many cryptocurrencies has crashed, with Bitcoin falling to just over $20,000 this week, down from an all-time high of nearly $69,000 in November. Meanwhile, a wave of layoffs has swept across the sector to prepare for a possible prolonged economic downturn. Now, the optics of those deals may have changed.

Any sports fan this year has been bombarded with crypto, including ads, stadium name changes, logos on jerseys, and NFT deals. But even by that standard, the NBA has excelled. In the last year alone, cryptocurrencies jumped to the second highest spending sector in NBA sponsorships, from 43rd, according to IEG., a consultancy for sports associations. Cryptocurrency brands spent more than $130 million on NBA sponsorship this season, up from less than $2 million last season, according to the firm.

“The influx of spending is unlike anything we’ve seen before. I would have expected it to be potentially a little more measured, but it’s been completely like, literally, a runaway train,” Peter Laatz, IEG’s global managing director, told him. he told CNN Business. “They were like spreading money everywhere.”

Just five crypto companies, including Crypto.com, Coinbase and FTX, were responsible for 92% of the industry spending that helped the NBA reach $1.6 billion in annual sponsorship fees this season, according to IEG. The firm described the spending between the companies as a “small arms race”.

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Then the market changed. On Tuesday, a day after Coinbase aired its “long live crypto” commercial during Game 5, the startup announced the layoff of 1,100 people. In an email to staff, Coinbase CEO Brian Armstrong noted the possibility of a recession, which he said “could lead to another crypto winter and could last for an extended period.”

Coinbase said the commercial was a fixed part of its ongoing deal with the NBA, as the firm signed a multi-year deal in October with the league to serve as the exclusive cryptocurrency platform partner of the NBA and WNBA. “This commercial was part of a preset package that came with our NBA sponsorship,” according to a company spokesperson.

Crypto.com, another cryptocurrency exchange, bought the naming rights to the stadium from the Los Angeles Lakers in November, a deal worth $700 million. He also entered into a multi-year deal to become the team for the Philadelphia 76ers. official partner of the t-shirt patch. Crypto.com announced this week that it will lay off 260 employees due to the market downturn.

In a statement, the company said it remains “focused on investing resources in engineering and product capabilities to develop world-class products, as well as our strategic sports partnerships and believes they will continue to play a crucial role in our mission to accelerate global development.” “. transition to cryptocurrency.

Binance, the rare cryptocurrency company that is hiring right now, recently appeared to investigate sponsorship deals other startups entered into. in a hiring announcementBinance CEO Changpeng Zhao said: “It wasn’t easy to say no to Super Bowl ads, stadium naming rights, big sponsor deals a few months ago, but we did it.”

IEG’s Laatz said the “only” thing he can think of to compare crypto sponsorship deals with is business spending activity during the dot-com bubble. all of that blew up and the deals disappeared,” he said.

But as long as the endorsement checks keep coming in, the NBA won’t feel the pain, Laatz said. “Teams … would take that money over and over again,” he said. “Getting it for a couple of years is better than getting nothing.”

With or without the same number of future endorsement deals, there are other ways the close relationship between the NBA and the larger crypto industry can continue, including through NFTs, which are chain-linked pieces of digital content. of blocks, the digital database that underpins cryptocurrencies.

The NBA is involved in the NFT marketplace with NBA Top Shot, a league-focused NFT marketplace that allows fans to buy, sell, and trade basketball highlights or “Moments.” Top Shot, released by Dapper Labs, was released to the public in October 2020 and has major investors in the game, including Michael Jordan and Kevin Durant.

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