Crypto sports sponsorships can pique the interest of retail buyers during a positive trend when cryptocurrency values are surging.
The amount of legitimately registered users and addresses surged to over 10,000 after the sponsorship campaign was announced.
In November of last year, during the bullish trend, Crypto.com issued a statement announcing that they had purchased the franchise rights to the arena where the NBA team Los Angeles Lakers play. The facility was renamed the Crypto.com arena the same year on the day designated as Christmas Day festivities.
The Miami Heat play at the American Airlines Arena, which has been renamed the FTX Arena by FTX many months before. However, the issue still stands: Are the stakes in arena rebranding going to be profitable over the protracted cryptocurrency winter? Are they generating a brand-new group of retail customers?
Although the weather in places like Los Angeles and Miami is often considered mild, the current state of the cryptocurrency market is entirely different. According to Bobby Ong, co-founder, and COO of CoinGecko, "retail customers feel unmotivated in cryptocurrencies due to the declining market, and therefore no degree of sponsorship can reverse this perception."
Information from CryptoQuant shows that Crypt.com has been having trouble keeping up with the surge in activities as a result of the obvious rise in traffic spurred on by the statement made regarding sponsorship.
For Cronos (CRO), the exchange token of Crypto.com, there were over 2,000 valid accounts at the start of November 2021. As exchange users of the platform receive fee reductions on transactions, keeping an eye on the amount of CRO owners is crucial because it's a strong indicator of the amount of actively trading merchants rather than those merely investing a few dollars.
Following the announcement of the sponsorship campaign, the number of valid registered users and addresses increased to over 10,000. Burak Tamac, a research associate at CryptoQuant, claims that following the revelation, the total number of active CRO addresses increased by 4.5 times, and the transaction count also saw a significant rise. But after that, the number of active addresses started to decline once more.
In response to inquiries about the information used to make the sponsorship choice, the chief marketing officer of Crypto.com, Kalifowitz, wrote a response through email. He said that the company does have more than 50 million customers worldwide and that investments in partnerships with sports organizations will continue. The alliance, which is a marketing scheme, aids in promoting the acceptability and implementation of cryptocurrency globally.
Many would argue that perhaps the increase in CRO's active members is only fortuitous because it occurs during the bull-run mania of 2020.However, Tamac cites FTX's endorsement of the Miami Heat Arena and the resulting rise in FTT token active addresses when the agreement was confirmed in April 2021 as evidence of a pattern. At the time, the cryptocurrency market was somehow uninteresting, as bitcoin only increased by around 2% monthly.
According to Tamac of CryptoQuant, it'd be difficult to obtain information on certain client cohorts by simply checking on on-chain records. At the moment, trading sites like Robinhood and Webull appeared with cryptocurrency exchange applications on the Apple App Store's top of the charts. And besides, it was the age of meme stock, and mobile was the center of attention.
Statistics from mobile app analysis company Data.ai reveals that Crypto.com's app failed to attract long-term engagement. In a bullish trend when crypto values are soaring, crypto sports endorsements help attract retail customers' interest
Perhaps, albeit barely, stadium sponsorship does have some sort of impact.
