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The cryptocurrency community has always insisted on decentralization and globalization. So it's no surprise that many cryptocurrency companies are sponsoring Formula 1 (F1) teams in an effort to reach a wider audience around the world.
Research by global analytics firm Nielsen Sport found that F1 has the potential to reach around 1 billion followers worldwide in 2022, with the majority being the 16-35 age group. The appeal of F1 is increasing, and cryptocurrency companies are joining this movement to assert their brand. Specifically, there are 10 F1 teams competing in the 2022 tournament, there are 8 teams that are being sponsored by cryptocurrency companies.
Cryptocurrencies and F1: An ideal combination
Mark DiMassimo, founder and chief creative officer at DiGo, a New York-based marketing firm, says that the interest of cryptocurrency companies with F1 is entirely justified from a marketing perspective. "You could argue that it's natural for cryptocurrency companies to fund F1 because both of these sectors are global, attractive and attract a lot of money," he said.
To prove DiMassimo's point, F1 team Red Bull Racing recently partnered with Singapore-based cryptocurrency trading platform Bybit in a three-year sponsorship at a price of $50 million per year. Earlier, cryptocurrency exchange Crypto.com announced a $100 million partnership with F1 for the 2021 "Sprint Series".
Igneus Terrenus, head of communications at Bybit, said that the cryptocurrency exchange sees sports sponsorship as a spearhead in its marketing strategy to increase brand recognition and popularity in key markets. "We are also sponsors of many of the top e-sport teams in the world, but F1 is still the most famous race in the world," Terrenus said. He added that F1 has a bigger and more global following than most other sports: "The Abu Dhabi 2021 GP race culminated in the thrilling final in which Max Verstappen of Red Bull Racing overwhelmed Lewis Hamilton of the Mercedes team – this race attracted 108 million spectators. The 2022 Super Bowl between the Rams and Bengals attracted only 101 million spectators.
Blockchain companies are also involved in F1. In January 2022, the Fantom Foundation, a layer 1 blockchain platform, announced their sponsorship to the Italian F1 racing team, Scuderia Alpha Tauri. Fantom CEO Michael Kong said that this partnership is important for a variety of reasons, of which the brand's presence is the most important. "Fantom attracts more attention because F1 has millions of viewers around the world. This contributes a lot to the increase in users on Fantom's network," he said.
Funding for F1 expands as NFT grows in popularity
While cryptocurrency companies were initially able to fund F1 from a marketing perspective, the development of NFT also presented many opportunities for organizations to participate in F1. For example, a study by Deloitte Global forecasts that in 2022 alone, NFT sports will generate more than $2 billion in transaction value — double that of 2021.
In addition, the study predicts that by the end of 2022, nearly 5 million sports fans globally will own sports collectibles using NFT. So the majority of cryptocurrency and blockchain companies that are sponsoring F1 racing teams have also issued NFT during their funding round.
On March 22, Fantom announced funding for American-Brazilian F1 drivers Pietro and Enzo Fittipaldi. According to Kong, the pair will carry Fantom's brand on their racing suits and helmets throughout the 2022 F1 season. In addition to the sponsorship deal, the Fittipaldi brothers will launch their first NFT series on the Fantom platform. "Both Pietro and Enzo have shown a strong interest in integrating the technology. This NFT series will bring unprecedented connections with fans, allowing them to interact with famous riders through a new medium," Kong said.
Besides fantom's recent NFT release, Terrenus said that Bybit will also be the main NFT launch market of Oracle Red Bull Racing's F1 competition team. Bybit's NFT market was launched in January 2022, but Terrenus believes it has received great support from the community.
The F1 community understands more about blockchain
While the fact that companies sponsor F1 teams and drivers is notable, many may wonder how the masses will take on these collaborations and the NFT. This is especially important to consider because NFT is still a new concept and not necessarily easy to understand for people who don't use cryptocurrencies.
But Kong says that Fantom has had a positive partnership with Alpha Tauri. The company was able to explain NFT, their benefits and opportunities when Fantom worked with Alpha Tauri's F1 driver Pierre Gasly on his NFT release. "Hopefully we can introduce blockchain technology to the F1 community more," Kong said.
Moreover, the captain of F1 teams seems to be very responsive to the sponsorship of cryptocurrencies. This is shown in an article published in motorsport.com. In it, when referring to FTX's sponsorship of Mercedes, Mercedes captain Toto Wolff said that "it's interesting to learn about cryptocurrency exchanges."
