• btc = $27 016.00 196.95 (0.73 %)

  • eth = $1 744.70 38.08 (2.23 %)

  • ton = $2.05 -0.05 (-2.34 %)

  • btc = $27 016.00 196.95 (0.73 %)

  • eth = $1 744.70 38.08 (2.23 %)

  • ton = $2.05 -0.05 (-2.34 %)

2 Oct, 2022
2 min time to read

During the ongoing Formula One Singapore Grand Prix, the Monetary Authority of Singapore will only allow teams to display their cryptocurrency sponsors' logos on cars and uniforms at the Singapore Grand Prix. No advertising will be allowed on the track or in the surrounding area, Bloomberg reports.  

F1's new active sponsors, the cryptocurrency companies, have seen a change in attitude following the fall in cryptocurrency prices and the collapse of billion-dollar projects this year. This has also had an impact on policy in Singapore, the UK and France, which have become more active in monitoring the digital asset market.

The collapse of cryptocurrencies has resulted in digital asset companies becoming more cash strapped. However, they are still keen to keep what they have already invested in F1 in order to gain a foothold on the global stage.

Jeremy Walls, senior chief executive of the Miami-based site that helped broker the Crypto.com deal, said:

I’m still seeing people doing crypto partnerships now, it’s just maybe not the pace that it once was.

Cryptocurrency partnerships with Formula One teams help raise their status in the eyes of an audience that is considered wealthy due to the high cost of entry into the sport, where tickets cost hundreds of dollars and TV channels pay high fees for exclusive broadcast rights.

Formula One teams are actively contracting with cryptocurrency companies - around 80% of Formula One teams have at least one cryptocurrency partner, including Formula One Group, which has its own $100 million deal with Crypto.com.

Given the problems in the cryptocurrency space, it is not very clear whether cryptocurrency companies will be able to keep up the pace of deals as demand for digital assets is now declining. Crypto.com and Bybit were among several large companies that laid off staff earlier this year.

Meanwhile, the FTX exchange, after signing a contract with Mercedes, has seen a "noticeable" increase in new customers, as well as an increase in interest from existing customers looking to take advantage of access to Formula One races.

There are examples of when partnerships have ended in failure. McLaren partnered with Turkish exchange Bitci.com, which at the time was the first to issue a fan token to a Formula One team, but that deal was quietly closed in February, less than a year later, after it failed to make payments to certain partners. McLaren is now exploring the possibility of launching a new fan token with OKX, which it hopes to launch in 2023, taking its time to ensure a "really robust" development.

Due diligence has become even more important this year amid a number of major cryptocurrency crashes, as well as increased regulation.

The high cost of sponsorship with racing teams is not deterring cryptocurrency companies. Crypto.com marketing director Stephen Kalifowitz said:

I was really looking for ways to meet a global audience and meet them quickly. F1 really delivers on that in a way I don’t think really any other sport does.

Cryptocurrencies are currently at one-year lows, with the general economic situation signalling a potential turn for the worse, and the future of multi-year Formula One deals in jeopardy. However, as Ted Dobrzynski, president of F1 sponsoring agency VIAGP, points out, this is a normal situation for the sport - sponsors come and go:

They’re going to have to regroup and the market will balance itself next season. When the cars are presented to the world in February next year, you’ll see who disappeared.