Are crypto companies sponsoring F1 for the glitz and glamor, or will NFTs demonstrate important use cases behind these partnerships?
The cryptocurrency community has always put an emphasis on decentralization and globalization. Therefore, it shouldn’t come as a surprise that a number of crypto companies are sponsoring Formula 1 (F1) racing teams in an attempt to further connect with audiences across the world.
Research by global analytics company Nielsen Sports found that Formula 1 has the potential to reach about one billion fans globally this year, with the 16–35 age group accounting for the biggest share. The appeal of F1 is clearly on the rise, and cryptocurrency companies are jumping on board to demonstrate their presence. To put this in perspective, there are 10 F1 teams for the 2022 season and crypto companies are currently sponsoring eight.
Crypto and F1: An ideal marketing match
Mark DiMassimo, founder and creative chief of DiGo — a New York-based marketing agency — told Cointelegraph that the interest crypto companies are taking in Formula 1 certainly makes sense from a marketing perspective. “You can argue that F1 is a natural extension from a sponsorship standpoint for crypto companies since both sectors are international, exciting and involve money,” he said.
To DiMassimo’s point, the F1 racing team, Red Bull Racing, recently entered a three-year partnership with Singapore-based crypto trading platform Bybit for $50 million per year. Prior to this, the cryptocurrency exchange Crypto.com announced a $100 million partnership with Formula 1 for its 2021 “Sprint Series.”
Igneus Terrenus, head of communications at Bybit, told Cointelegraph that the crypto exchange views sports sponsorships as a key part of its global marketing strategy to build brand awareness and sentiment in major markets. “We are also partners to some of the top e-sports teams in the world, but Formula 1 remains the most popular international racing series,” said Terrenus. He added that Formula 1 has a larger and more global following than almost every other sport:
“2021’s Abu Dhabi GP culminated in a dramatic nail-biting final-lap decider that saw Red Bull Racing’s Max Verstappen prevail over Mercedes’ Lewis Hamilton — this attracted an audience of 108 million. Whereas Super Bowl 2022 between the Rams and Bengals drew an audience of 101 million.”
Patrick Hillman, chief communications officer at Binance, told Cointelegraph that F1 is a sport the crypto industry gravitates toward, given its global presence and fan base. “Binance recently announced a partnership with the BWT Apline F1 Team. There are very few sports as global as F1,” he said.
Blockchain companies are also getting involved with Formula 1. In January 2022, Fantom Foundation, a layer-one blockchain platform, announced its sponsorship with the Italian Formula 1 racing team, Scuderia Alpha Tauri. Fantom CEO Michael Kong told Cointelegraph that this partnership is important for several reasons, with exposure being a primary benefit. “It puts a lot more eyeballs on Fantom since F1 is watched by hundreds of millions worldwide. “This has partly been responsible for user growth on the Fantom network,” he said.
F1 sponsorships expand as NFTs gain traction
But, while crypto companies may have initially been drawn to F1 sponsorships from a marketing perspective, the rise of nonfungible tokens (NFTs) is presenting new opportunities for organizations involved with Formula 1. For instance, a recent Deloitte Global study anticipated that in 2022 alone, sports NFTs will generate more than $2 billion in transactions — double the volume seen in 2021.
Additionally, the study predicts that by the end of this year, roughly five million sports fans around the globe will own an NFT sports collectible. Given this, the majority of crypto and blockchain companies sponsoring Formula 1 racing teams have also launched NFTs to coincide with sponsorships.
On March 22, 2022, Fantom announced a sponsorship with the Brazilian-American Formula 1 racing drivers Pietro and Enzo Fittipaldi. According to Kong, the duo drivers will display Fantom imagery on their race suits and helmets throughout the F1 2022 season. In addition to the sponsorship agreement, the Fittipaldi Brothers will launch their first NFT series on the Fantom network. “Both Pietro and Enzo have demonstrated a strong interest in emerging technologies. These NFTs will deliver unprecedented access to fans, allowing them to engage with the popular athletes through a new medium,” Kong said.
Pietro Fittipaldi further told Cointelegraph that he and his brother decided to launch an NFT series with Fantom due to their involvement in the crypto world:
“We wanted to be able to share some of our most exclusive items with our fans and the people who support us through the NFT community. We have always been very active on the digital side of things. My brother and I won the first F1 virtual world championship, so to be able to do something else digitally through NFTs made a lot of sense.”
Fittipaldi explained that the NFTs will be designed by the Brazilian artist Rich, who is famous for his graffiti artwork. “These art pieces will then be digitized into unique NFTs that offer access to exclusive F1 championships, along with access to my indy 500 F1 helmet and virtual mini-world championship replica helmet,” said Fittipaldi.
Kong added that NFT agency Infinity NFT will support the Fittipaldi Brothers sale by delivering four NFT categories for fans to choose from, each offering varying levels of direct engagement.
In addition to Fantom’s recent NFT launch, Terrenus said that Bybit will serve as the primary marketplace for the NFTs released by F1’s Oracle Red Bull Racing team. Bybit’s NFT marketplace was launched in January 2022, but Terrenus believes that it has already generated impressive support from the community.
Bybit will also issue fan tokens for the Oracle Red Bull Racing team, expected to launch next year. According to Terrenus, fan tokens will ensure that the community’s voice is amplified when it comes to the team’s decision-making processes.
F1 community learns about blockchain
While it’s notable that crypto companies are sponsoring F1 racing teams and drivers, some may question how the mainstream will receive these partnerships and NFTs. This is especially important to consider, given the fact that NFTs are still a new and sometimes unclear concept for non-crypto natives. For instance, recent research from the NFT Club found that although NFTs have increased in popularity since Dec. 2020, the most popular question of 2021 was “where to buy NFTs.” This demonstrates that there is still a large sector of individuals unfamiliar with the NFT space.
Kong noted that Fantom has had a positive experience collaborating with Alpha Taur, noting that the company was able to explain NFTs, their benefits and possibilities when Fantom worked with Alpha Tauri F1 driver Pierre Gasly on his NFT launch. “Hopefully, we’ve been able to further introduce them to blockchain technology,” Kong commented.
Fittipaldi added that he believes NFTs will be well received by non-crypto natives due to the utility behind the tokens. “A lot of times, people think NFTs are just about buying digital artwork, but behind these creations is access to exclusive F1 championships.” With this in mind, Fittipaldi shared that he and his brother plan to launch more NFT collections moving forward. “The whole idea behind this drop is for our community and fans to have something exclusive, which we plan to offer more of moving forward.”
Moreover, crypto sponsorships also seem to be resonating well with F1 team leaders. An article published this month on motorsport.com highlighted this notion, as the Formula 1 Mercedes team boss Toto Wolff stated that “it was fascinating to understand crypto exchanges,” in reference to FTX’s sponsorship with Mercedes.