Crypto in football, just the beginning?
The largest and most watched sporting tournament in the world is underway in the form of the 2022 World Cup. It presents a unique opportunity for brands and industries to market themselves to the world. Football fans are eagerly waiting for the 2022 World Cup to start, which will be held from 20th November to 18th December 2022.
This year Crypto.com (one of the world’s leading cryptocurrency exchange platforms) has agreed to a deal with FIFA to make it one of the major sponsors of the tournament, continuing a recent trend in football which sees football clubs and leagues around the world using cryptocurrency to further their business sporting interests. A number of large professional football clubs now have people, or even entire departments, dedicated to researching and developing investment strategies related to the cryptocurrency market. In fact, last year, an ex-Real Madrid player became the first example of a player transfer being paid using cryptocurrency. Interestingly, however, football has traditionally not been a particularly forward-thinking sport in terms of technology nor is it particularly progressive in its thinking. Why do football teams have 11 players? Why are the pitches the size that they are? Well, if you answered “That’s just the way it has always been” then you are correct. Much of the football industry is opposed to change, and even questioning existing rules or regulations is frowned upon. Clubs and leagues have also often taken a long time to adapt to new technologies when compared to other sports and industries. Data analysis for example, used to track performance metrics and make player recruitment decisions kicked off in American sports far earlier than it did in football or “soccer”.
So what does football’s relatively early interest in cryptocurrency and NFT’s tell us?
Well, seeing as the estimated revenue from football (in Europe) is estimated to be around 27 billion euros, with the Premier League alone contributing to around 3.3 billion pounds in UK taxes in the 2016/17 season; it is clear that football clubs have money to spend. This ever-increasing revenue stream appears to be making them less risk-averse. They’re also not resting on their laurels, seeing cryptocurrency and blockchain technology as a way to gain a further advantage both from a sporting and business perspective.
Professional football’s interest in cryptocurrency appears to be a good thing for the cryptocurrency industry as a whole.
It helps further normalize cryptocurrency as a form of payment or investment and allows for clubs and leagues to explore unique ways of marketing themselves. This in turn, also markets blockchain technology more generally. Football clubs appear to be using crypto as a form of diversification for their investment portfolios, but also as a sponsorship tool (as demonstrated by the growing number of clubs being sponsored by crypto companies). On top of this, some clubs have begun creating and selling fan tokens. Fan tokens are utility tokens that grant fans access to membership bonuses such as merchandise or exclusive promotions. They could allow fans to participate in minor club decision-making like deciding which songs ought to be played in the stadium or having a say in new jersey designs for example. Fan tokens are the new frontier in blockchain technology in football, and the idea is that they will allow fans to interact with their favourite clubs and players in an entirely new way. It appears that the concept has not really taken off yet, but the real-world utility of such tokens appears to be key to getting sceptical fans on board. With the World Cup underway, FIFA has also attempted to get in on the action. Their release of fan tokens, as well as Binance's partnering with an existing football token Chiliz (CHZ), (the #40 ranked altcoin that powers the Socios.com football fan token platform), represents new possibilities in the NFT football community.
Is this newfound interest in crypto here to stay?
During the 2018 World Cup in Russia, we saw cryptocurrency investment spike significantly. With football having invested heavily in the industry since then, one would think the 2022 World Cup would have a similar impact. Time will tell. What is certain though, is that football’s eagerness to invest in crypto and blockchain is stronger than ever - even during more difficult market conditions in 2022. This can only be a positive thing for the wider industry. It illustrates that the appeal of cryptocurrency is not lost; even amongst more “technologically conservative communities”. This should be a cause for optimism amongst crypto companies. If a sports industry famous for the fact that most of its rules have little to no justification other than “this is how it has always been” can invest in a technology that is potentially revolutionary - then the possibilities really may be endless.
