Crypto.com started life as the blog of a University of Pennsylvania professor, Matt Blaze, who sold to the name in 2018 for an undisclosed sum to a little-known crypto and credit card startup called Monaco.
Monaco, now a Singapore-based crypto exchange renamed Crypto.com, has just agreed to pay $700 million for that blog’s title over 20 years on the Los Angeles arena, synonymous with Lakers basketball championships and a concert venue for artists from Taylor Swift to Paul McCartney.
The massive amount of money thrown at the Staples Center is a testament to how the massive rise of bitcoin is reshaping the corporate landscape and of how newly minted crypto giants are willing to pay to win. new retail customers.
Sports sponsorship is a long-term way for companies to gain name recognition, at the expense of fan loyalty.
In June, Bahamas-based exchange FTX purchased the naming rights to the stadium as the home of the Miami Heat basketball team and that same month became the official cryptocurrency platform of Major League Baseball and of Seven-time Super Bowl champion quarterback Tom Brady.
AEG, which owns and operates the Staples Center, hopes that the crypto brand works both ways. Todd Goldstein, AEG’s chief revenue officer, said that they were actively looking to Crypto.com as a naming partner because they hoped to appeal to “a portion of their demographic” — specifically, consumers. younger, more tech-savvy.
“When the shock is just a little bit over, there are still people catching on to it, how good it can be for the arena and good for the counterparty,” Goldstein told the Financial Times.
The move to turn the Staples Center into a Crypto.com Arena from Christmas Day will also attract more scrutiny of the little-known company as well as questions about its ability to raise hundreds of millions of dollars. it will need to pay for the name change.
Kris Marszalek, chief executive officer and majority shareholder, has said it is a “direct cash deal”.
According to Marszalek, even without brand recognition, the five-year-old privately held company has 3,000 employees around the world and generated hundreds of millions of dollars in revenue in the second quarter of this year.
“In the second quarter, we took in about a quarter of Coinbase’s revenue, and we’ve been profitable since the beginning of the year,” the Crypto.com boss told the FT. “The crypto space is super hot and we have seen 20x revenue growth this year.”
Coinbase – becomes the only publicly listed crypto exchange this early year with a valuation of $76 billion, roughly the same as France’s BNP Paribas – generated $2 billion in net sales from April to June, surpassing $1.6 billion in the previous quarter.
NS Bitcoin price soars have transformed a handful of companies, such as Coinbase, into multi-billion dollar businesses that surf on a wave of new investors and high returns they can charge.
Recent FTX Rival Exchange achieved a valuation of 25 billion dollars at a funding round, leaping from a valuation of just $1 billion last February. Gemini, the cryptocurrency company owned by Tyler and Cameron Winklevoss, also just completed a round of funding that put a $7.1 billion price tag on the exchange.
Unlike traditional markets, where profit margins drop to low levels, Crypto.com and its peers can charge 0.4% fees on transactions that take place on-site and even more if the transaction takes place on the company’s mobile application.
Crypto.com transfers billions of dollars worth of cryptocurrency transactions every day and has processed more than $415 billion in transactions on its exchange since March of last year, according to data from the analytics firm. CryptoCompare digital assets.
This translates to $1.2 billion in revenue with an average fee of 0.3%, but this does not include in-app transactions where exchanges can charge double or triple. times compared to transactions at their main locations. The number of transactions was not disclosed, rendering the FT’s estimate of the company’s revenue a low number, according to the company.
Cryptocurrency Exchange usually charge investors less the more they trade. This incentivizes retail traders to take greater risks with their sanctions on bitcoin and others because in addition to putting more and more money into their accounts, they can be tempted coax to enhance his trading by using leverage. Exchanges can also make money through their own digital currencies and through lending operations.
For its part, Crypto.com has a rapidly growing portfolio of sports properties, including Paris Saint-Germain and Italy’s Serie A in football, Formula 1 racing, UFC and Philadelphia professional fighting. Basketball’s 76ers, all signed this year.
Marszalek said it is also “contemplating” fundraising in a market where conditions are extremely favorable. Venture capitalists agree. Greg Carson, managing partner at XBTO Humla Ventures, said digital asset-focused firms are attracting a premium because of the “explosive” growth and high returns they can afford charge.
Crypto skeptics are pointing to the stadium renaming agreement as a sign that we are near the top of the market, a suggestion derided by many in the industry.
But even if the cryptocurrency itself is at the center of the disagreement, there doesn’t seem to be a fancy moniker for the arena. “You would call it The Crypt,” said sports commentator Dan Patrick. “Not Crypto.com or anything.”