The collapse of FTX came as a shock to many, particularly Formula One fans who had gotten used to the Crypto.com logos on the Grand Prix as well as the FTX sign on the race cars, particularly Lewis’ silver arrow. If you were an avid follower of the sport, already going through the ‘Hamilton heartbreak’ late last year, you have a right to have thought that crypto was in the bull market once more. This is due to the multiple deals and sponsorships across all teams.
The new season unveiled a completely different image as fewer teams now had a blockchain-based sponsor. Formula One (F1) definitely re-evaluated its marketing strategy, given its reputation in the crypto industry.
The Singapore Grand Prix today will showcase a new side of Blockchain innovations, such as digital art exhibitions, NFT Tickets, and Wing sponsorship. As the sport sways from the instant riches ideology to a greater level of maturity, focusing on tangible use cases of the technology, Web3 may just be what this marriage needs after the FTX shock.
The F1 and crypto marriage
Crypto.com was the first company in the industry to get into a sponsorship with the very popular and expensive sport. The company’s name was seen on every circuit across the twenty countries as well as on the cars. The relationship between the two industries was a peculiar and rather special one.
This is because both parties in this marriage had a lot in common, especially with innovation at their very core. While Formula One is known for its fast cars, engines, and innovative ideas on how to better their technology each season, the crypto industry was also famous for its new innovative ideas and use cases that appealed to most Formula One fans spread across five continents.
The Formula One fan base is made up of Young and tech-savvy individuals, which is similar to most crypto enthusiasts. According to a survey, Formula One fans are, on average, 31 years old, with the larger percentile being of the male gender. These similarities were perfect for crypto sponsors, who also identified that about 85 million Formula One fanatics are also active investors in the crypto industry.
Other companies and exchanges followed suit, which saw significant deal signings from almost all racing teams by the end of 2022. For instance, Redbull, currently leading this season thanks to their world champion race driver Max Verstappen, partnered with Bybit and Tezos, the latter sponsored the team in with a $150 million three-year deal, Haas with OpenSea and AlfaRomeo with CryptoData and Floki.
However, this was short-lived after the crypto winter, which led to F1 shaking down its crypto addiction. As the industry experienced its woes in 2022, highlighted by the FTX collapse, followed by the exchanges filing for bankruptcy, left the Mercedes-AMG team in hot water.
Toto Wolf, who is known for his strategic management of the team and outbursts, commented on the collapse and stated that the collapse of the exchange had left him in shock as he strongly believed in blockchain technology as the way of the future. He added that the team considered the Sam Bankman Fried-led exchange as a financially sound partner. This collapse led to most teams cutting ties with their sponsor.
The Web3 rekindle
Even as most teams cut ties with the industry, various teams still held on to the unions. For instance, Wiliams on March signed a new deal with Kraken. Paul Asencio stated that the best they can do is mitigate the risks, as what happened to the crypto industry can happen to any company the team partners with.
The relationship has seemingly taken a new trajectory where teams are now focusing on more practical use cases; for instance, today, the Singapore Grand Prix announced the launch of the HSAC Web3 GPO, a virtual F1 experience where members can win from the 1 million HSAC tokens in the prize pool. This inaugural event coincides with the largest Blockchain conference in 2023, Token2049.
The Web3 events will take place in different venues across the world, which attract thousands of people to the respective cities each year. The virtual GP is a technological use case intended to keep fans interested in the new technological advancements in blockchain technology while at the same time offering high-speed Formula One action. This new advancement is community eccentric in nature, giving new opportunities for teams and sponsors to participate in blockchain technology even with the industry’s reputation shift.
