Are crypto businesses sponsoring F1 for the glamour and glam, or will NFTs show that these relationships have real-world applications?
Decentralization and internationalisation have always been important to the cryptocurrency ecosystem. As a result, it should come as no surprise that a number of cryptocurrency companies are sponsoring Formula 1 (F1) racing teams in an effort to reach a wider audience.
According to Nielsen Sports, Formula 1 has the potential to reach around one billion fans worldwide this year, with the 16–35 age group accounting for the largest share. The popularity of Formula One is growing, and bitcoin companies are hopping on board to show their support. To put this in context, the 2022 Formula One season will have ten teams, with crypto businesses presently sponsoring eight of them.
F1 with cryptocurrency: a marketing match made in heaven
From a marketing standpoint, Mark DiMassimo, founder and creative chief of DiGo, a New York-based marketing business, told that crypto corporations’ interest in Formula 1 makes sense. “From a sponsorship standpoint, you could argue that F1 is a natural extension for crypto firms because both industries are worldwide, thrilling, and involve money,” he said.
To DiMassimo’s point, the F1 racing company Red Bull Racing recently signed a three-year deal worth $50 million per year with Singapore-based crypto trading platform Bybit. Prior to this, Crypto.com announced a $100 million collaboration with Formula 1 for the “Sprint Series” in 2021.
Bybit’s head of communications, Igneus Terrenus, told that sports sponsorships are an important component of the crypto exchange’s global marketing strategy for increasing brand awareness and sentiment in key regions. “We’re also partners with some of the world’s best e-sports teams,” Terrenus said, “but Formula 1 remains the most popular international racing series.” He went on to say that Formula One has a bigger and more global fan base than practically any other sport:
“The 2021 Abu Dhabi Grand Prix ended in a spectacular nail-biting final-lap decision between Red Bull Racing’s Max Verstappen and Mercedes’ Lewis Hamilton, which drew a 108 million-strong viewership. Super Bowl 2022 between the Rams and Bengals had a record-breaking audience of 101 million viewers.”
Given its global visibility and fan base, F1 is a sport that the crypto industry gravitates toward, according to Patrick Hillman, chief communications officer at Binance. “Binance established a relationship with the BWT Apline Formula One Team lately. “F1 is one of the few sports that is truly global,” he remarked.
Formula 1 is also becoming associated with blockchain startups. Fantom Foundation, a layer-one blockchain platform, announced its sponsorship of Scuderia Alpha Tauri, an Italian Formula 1 racing team, in January 2022. This cooperation is vital for various reasons, according to Fantom CEO Michael Kong, with exposure being one of them. “It brings a lot more people to Fantom because F1 is watched by hundreds of millions of people around the world.” “This has contributed to the Fantom network’s user growth,” he explained.
As NFTs gain popularity, F1 sponsorships are growing
However, while crypto businesses may have been lured to F1 sponsorships originally for marketing reasons, the growth of nonfungible tokens (NFTs) is opening up new prospects for Formula 1 teams. According to a recent Deloitte Global report, sports NFTs would produce more than $2 billion in transactions in 2022 alone, more than doubling the amount witnessed in 2021.
According to the report, about five million sports fans around the world will own an NFT sports collectible by the end of this year. As a result, most crypto and blockchain organisations that sponsor Formula 1 racing teams have also launched NFTs to go along with their sponsorships.
Fantom announced a sponsorship deal with Brazilian-American Formula One racers Pietro and Enzo Fittipaldi on March 22, 2022. The two drivers will wear Fantom graphics on their race suits and helmets throughout the F1 2022 season, according to Kong. The Fittipaldi Brothers will also debut their first NFT series on the Fantom network, in addition to the sponsorship deal. “Both Pietro and Enzo have shown a keen interest in cutting-edge technology. These NFTs will provide fans unparalleled access to their favourite players, allowing them to interact with them through a new medium,” Kong stated.
Pietro Fittipaldi also informed that because of their involvement in the crypto sector, he and his brother decided to launch an NFT series with Fantom:
“We wanted to be able to share some of our most exclusive goods with our friends and supporters in the NFT community,” said the team. On the digital side of things, we’ve always been really engaged. My brother and I won the first virtual world championship in Formula One, so being able to achieve something else digitally using NFTs made natural.”
The NFTs will be designed by Brazilian artist Rich, who is known for his graffiti work, according to Fittipaldi. “These art pieces will subsequently be digitised into one-of-a-kind NFTs that grant access to special F1 championships as well as my indy 500 F1 helmet and virtual mini-world championship replica helmet,” Fittipaldi explained.
The Fittipaldi Brothers sale will be supported by NFT agency Infinity NFT, which will provide four NFT categories for fans to choose from, each with various levels of direct interaction.
In addition to Fantom’s latest NFT debut, Terrenus stated that Bybit will be the major marketplace for the Oracle Red Bull Racing team’s NFTs. Although Bybit’s NFT marketplace only debuted in January 2022, Terrenus feels it has already received a lot of positive feedback from the community.
Bybit will also sell fan tokens for the upcoming Oracle Red Bull Racing squad, which is set to debut next year. Fan tokens, according to Terrenus, will ensure that the community’s voice is heard during the team’s decision-making processes.
The Formula One community learns about blockchain technology
While it’s notable that crypto companies are supporting F1 racing teams and drivers, some may wonder how these collaborations and NFTs will be received by the general public. This is especially crucial to consider considering the fact that non-crypto natives are still learning about NFTs, which can be a confusing notion. According to new research from the NFT Club, despite the fact that NFTs have grown in popularity since December 2020, the most often asked question in 2021 was “where to acquire NFTs.” This suggests that a sizable portion of the population is still unfamiliar with the NFT industry.
When Fantom collaborated with Alpha Tauri F1 driver Pierre Gasly on his NFT debut, Kong said Fantom had a favourable experience partnering with Alpha Taur, noting that the firm was able to explain NFTs, their benefits, and prospects. “Hopefully, we’ve been able to give them a better understanding of blockchain technology,” Kong said.
Fittipaldi also feels that because of the utility of NFTs, they will be positively embraced by non-crypto natives. “A lot of people think NFTs are merely for buying digital artwork, but these works also provide you access to exclusive Formula One championships.” With this in mind, Fittipaldi and his brother have stated that they intend to create more NFT collections in the future. “The whole point of this drop is to give our community and fans something special, which we aim to do more of in the future.”
Furthermore, crypto sponsorships appear to be a hit with F1 team owners. In a recent piece on motorsport.com, Toto Wolff, the head of the Mercedes Formula One team, claimed that “it was intriguing to grasp crypto exchanges,” referring to FTX’s sponsorship with Mercedes.
Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.