Tezos, FTX, Velas… F1 teams cancel their crypto sponsors

Updated on January 09. 2023 @ 11:23

Crypto winter is well established in the market and this seems to be scary, especially in F1 teams. Since the year crash e FTX and market uncertainty, the latter cancel one after another their sponsors with crypto exchanges or blockchain. What does this mean?

FTX crash: F1 teams split from cryptos

Partnerships between teams F1 and crypto players started in 2020. At that time, the market seemed to be maturing and the desire for mass adoption was on everyone’s mind.

The championship had signed the first contract with the exchange Crypto.com, known to it aggressive marketing campaignswith an agreement of 100 million ALL dollars.

Since then, F1 has grown fond of this type of partner, mixing promotion crypto opportunitiesbut also that of NFT for motor racing fans.

In early 2022, ready 80% of stalls had at least one crypto sponsor in their body.

However, since crash e FTXenthusiasm has lost its flavor and F1 teams seem more cautious.

Surprisingly, the stables Mercedes-AMG has broken deals with the Sam Bankman-Fried swap. But she is not the only one.

Redbull, the winner of the 2022 championship, has decided to split Tezos after a partnership of almost 2 years.

At the beginning of 2023, Ferrari and Velas Network announce the end of their contract signed in 2021.

Crypto sponsor Velas Ferrari
End of sponsorship between Ferrari and Velas Network

These contract violations are not without consequences, as teams give up several tens of millions dollars. Ferrari, for example, sees its budget for the season cut 55 million.

And with them, it is the image of crypto that is starting a marketing push.

Officially, his removals will be related to strategic differences. However, crypto winter is the main reason for this rift between F1 and the crypto universe.

The disastrous year that just ended has left a bitter taste for investors. F1 wants to protect itself of cataclysm as FTX, Earth or Celsius, which could spoil the brand image of his stalls.

Economically, this type of sponsor can also bring big losses. This is the case of Mercedes AMG, which almost lost 15 million dollars after bankruptcy FTX.

These losses and the anticipated shortfall from sponsor contracts will probably never be returned to the sports franchises that have trusted their crypto partner.

So, faced with the uncertainty of the market as a whole and the environmental risk of bankruptcy, the world of Formula 1 is retreating from cryptocurrencies which they exhibited for some time.

For now, this frustration is limited to motorsports, and crypto companies needn’t worry.

Tezosfor example, it still stands alongside major franchises like Manchester United for football or vitality for electronic sports.

Crypto.com, having spent 144 million dollars in sports sponsorship in 2022, it is also still invested in NBA alongside the Philadelphia 76ers. The platform was also a key partner of Soccer World Cup in Qatar.

Therefore, the biggest loss is to the crypto ecosystem as a whole, which benefits less visibility and that hinders the goal of mass adoption.

Therefore, market movements will be crucial for crypto sponsors in 2023.

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