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How Sports Embrace the Cryptos and Digital Assets

25 July 2022 08:27, UTC
Sheya Bhute

It was in 2014 when Bitpay and ESPN teamed together to promote the St. Petersburg Bowl collegiate football game. As the first large contract in the crypto sports industry, it was a huge achievement. The New York Giants became the NFL's first crypto-sponsored team this year when they partnered with Grayscale Investments. A slew of sports-themed NFTs and fan tokens will emerge as the NFT market develops. To begin with, these digital tokens were designed only to entice fan communities to participate. Using them, sports teams and their fan bases have a more effective way of promoting and connecting.

It is a kind of virtual trade card that can be traced using immutable blockchain technology to confirm its validity – Sports NFTs (short for "non-fungible tokens"). Digital trading cards and other gaming souvenirs may be created using these tools by clubs and teams, as well as gamers. Although NFTs are only getting started in the sports industry, their enormous potential is clear.

The majority of sports sponsorships have come from bitcoin exchanges and payment companies, indicating a strong connection between sports enthusiasts and cryptocurrency adoption. This year, Oakland A's offered a full season suite for one Bitcoin, which is the first sports franchise to accept cryptocurrency for ticket transactions. Due to its engagement in the digital collectible card platform NBA Top Shot, the NBA has been one of the most successful companies to use NFTs. FLOW blockchain-based game enables participants to trade, buy, and sell NBA "moments," which are held in digital wallets on the blockchain.

In May of this year, the site had more than one million registered users. In April, a rare LeBron James moment sold for $387,600 on the secondary market for Top Shot. The crypto, known as "Fan Tokens", may be used to get access to club-specific prizes and advantages. All of them are built on the blockchain. Tokens are a great way to thank supporters for their loyalty to the club by granting them access to exclusive content, goods, or events. It isn't uncommon for businesses to offer digital images or videos in the form of NFTs, which may be exchanged like an online delivery card.

No-fake videos are maintained on a blockchain, an open log of transactions, which makes it difficult for anyone to forge them. In Europe, the popularity of NFTs is spreading to soccer. Several big European soccer clubs, notably Real Madrid and AC Milan, have entered into license agreements with the fantasy soccer game Sorare. In the game, users take on the role of soccer player NFT managers, putting together virtual teams on the Ethereum network. As in conventional fantasy soccer, teams are rated according to the performance of their players on the field.

Blockchain-enabled technologies have the potential to unleash all of the future's latent potential and additional opportunities. Blockchain and the fan club concept have created a new paradigm in the crypto economy, but they are also facing several challenges, such as standard implementation, educating the public about the technology, and tax compliance.

Fortunately, with successful trials on sports memorabilia, game tickets, and esports, digital assets are swiftly absorbed into the sports ecosystem. An example of a story that has done well in the wake of the NFT buzz is NBA Top Shot. Since its release in Q4/2020, sales have been steady.

By 2027, the global sports sponsorship business is anticipated to be worth about 90 billion dollars a year. Cryptocurrencies and blockchain technology are expected to become more popular in the sports business in future years.