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TPan here! I’m at Consensus this week, so I won’t be writing my usual pieces. However, I do have some great content for you from someone else in the space.
Today we have Malcolm Lemmons with his thoughts on Crypto and web3 and its relationship with athletes. I always appreciate different perspectives about web3, and Malcolm provides a good one. He is a former pro basketball player and creator of The Hype Report, a newsletter that covers the intersection of sports, AI, and web3.
Check out Malcolm’s newsletter at The Hype Report and follow him on Twitter.
In 2017, I had just come home from playing pro basketball in Japan.
I’m at a bar with two of my closest friends and one of them turns and says to us, “We should put our money together to buy one Bitcoin.”
“Digital money? Yeah right…” my other friend said. “It's a scam.”
Personally, I was intrigued. But when I looked at my bank account, the price of a few thousand dollars per bitcoin was more than I was willing to invest at the time. I had to make my money last through the summer until my next contract.
Looking back, we would have made a substantial return but as the saying goes, hindsight is always 20/20.
Today, my conviction about crypto, especially bitcoin, has only gotten stronger.
Not only because of the price and upside, but also because I’ve learned more about the fundamental native behind blockchain technology and why it's game changing.
Since the beginning of 2020, I have been diving headfirst into learning as much as I can about web3 and crypto, and couldn't be more bullish.
To me, crypto is a revolution more than anything. It’s a revolt against the current banking system which is antiquated and exploitative.
Web3 is largely about giving people who create and build on the internet more ownership over their IP and data.
Conceptually, it can also shift how we transact and interact on a global scale.
I’ve been a believer for years now and even though situations like FTX might occur, in 10 years we’ll look back at these obstacles and realize how miniscule they were to the lasting impact web3 will have worldwide.
Over the years, the narrative has shifted regarding athletes thinking of themselves as businesses as well as what they invest in.
15 years ago, it was more common for athletes to put their dollars into car washes and restaurants.
Today, athletes are venturing into tech, crypto and building their own venture funds.
A lot of that change is due to a generation of digitally native athletes who have grown up with technology at their fingertips.
The other side of it is the advent of social media has also played a crucial role as access to information and knowledge is more widespread.
Many athletes today tend to share knowledge amongst each other about what they’re investing in, the latest trends and how they can leverage technology in various ways.
Typically this happens in the locker room or through other avenues of personal connection. Some athletes even have people in their circle or on their team who’s specific role is focused around finding new business opportunities.
There are also exclusive communities and collectives for athletes where they find deal flow that might not be accessible otherwise.
Most agents and financial advisors won’t discuss crypto with the athletes because it's unregulated and deemed risky. Although this is the case, the majority of athletes still recognize the importance of staying up to date on the latest developments in tech and want to be involved in some capacity.
Typically, it seems older athletes are more reserved when it comes to new trends and forms of innovation. In the past, there have been a number of athletes who have been taken advantage of by agents, or advisors and lost millions. Stories like this often deters veterans and former athletes from taking risks and wanting to explore novel opportunities.
There is also a focus on wealth preservation for older athletes and given the volatility of crypto, it can be hard for them to deal with the inevitable ebbs and flows of the crypto market. But that doesn't mean more experienced athletes aren’t dabbling in the space.
Younger athletes on the other hand, have a better overall understanding of how web3 can help them engage with their audience and contribute to them building their brands.
There are multiple active athletes who have signed sponsorship and endorsement deals with web3 brands such as Lionel Messi with Sorare and Lamelo Ball with Sandbox.
Lionel Messi Partners with Sorare
Despite negative media attention, scams and rug pulls, plenty of athletes have also opted to receive bonuses and salary in crypto.
As the world becomes more digital, I believe athletes will continue to look at crypto as an alternative for compensation because of the long term growth potential.
As most of us remember in November 2022, the crypto world came to a screeching halt.
FTX, which was once one of the world's leading cryptocurrency exchanges, collapsed right before our eyes. The news sent social media into a frenzy. Sam Bankman-Fried, the 30-year-old wonder child and CEO, lost billions overnight.
Millions of users scrambled in an attempt to recover funds while investors quietly wrote their investments down to zero. The one question everyone was asking was, “How could this happen?”, including the sponsored athletes that were involved.
Hall of Fame NFL quarterback Tom Brady has served as a brand ambassador for FTX since 2021 and even appeared in a series of commercials.
The former Tampa Bay Buccaneer supposedly held over 1.1 million common shares (valued at around $45 million) in the defunct cryptocurrency exchange, while his ex-wife and fashion model Gisele Bündchen held around 680,000 (valued at around $25 million), as reported by Bloomberg and Insider.
Fortunately this isn’t real
Unfortunately, he wasn’t the only athlete who had a vested interest in FTX or the crypto landscape for that matter.
Here are several athletes and their involvement in crypto over the past few years:
Spencer Dinwiddie (bitcoin investor and co-founder of web3 startup Calaxy)
O’Dell Beckham (received compensation in Bitcoin)
Russell Okung (received compensation in Bitcoin)
Aaron Rodgers (received compensation in Bitcoin)
Klay Thompson (received part of his salary in Bitcoin)
Andre Iguodala (received part of his salary in Bitcoin)
Summa Rae (received compensation in Bitcoin)
CJ McCollum (has a partnership with StormX)
Cade Cunningham (signed a multiyear partnership with BlockFi and receive his signing bonus in Bitcoin)
Luana Pinherio (collaborated with Bitwage, to convert portions of her salary into Bitcoin)
Steph Curry (global ambassador for FTX)
Udonis Haslem (lost $15 million in FTX investment)
Paul Pierce (recently fined by SEC for promoting EMAX coin)
And believe me when I say this is just the tip of the iceberg.
Overall, athletes and crypto have become more correlated over the past couple of years, but why? With the volatility and instability of the crypto market, shouldn’t athletes (at least the ones looking to preserve their wealth) avoid it?
Let’s examine it a little closer…
Why I Believe Athletes Have Ventured Into Crypto
As I stated previously, web3 represents a movement.
It’s not so much about the technology as it is an ideology of giving power and ownership to the masses.
In my viewpoint, crypto is the gas that powers the engine of this movement.
It gives people the ability to buy, sell and trade without intermediaries.
It gives way to trustless and permissionless transactions.
Take Bitcoin for example. It’s the oldest and most notable cryptocurrency.
Some of the main benefits include:
Instant access to funds
Quicker transaction times
Hedging against inflation
Easier international transfers
Limited supply which can increase demand
The fundamentals of crypto can be attractive to anyone looking to take control over their own devices.
Bitcoin is essentially digital gold. The upside is clearly there and the novelty peaks interest.
Given that athletes are now privy to some of the latest and greatest tech advancements these days and the basic characteristics of crypto, wouldn’t this intrigue anyone?
You might be saying, well there are thousands of coins, and exchanges out there. How do you know the difference?
Many don’t.
This is why we’re seeing situations like FTX or Luna happen, and why my sentiment is always about due diligence first. Whether it’s Bitcoin, buycoin, or buttcoin (this isn’t real btw) — you have to know what you’re getting into.
Secondly, innovation takes time. And during that time, bad actors will appear and be weeded out over the long term. It’s a natural process of evolution.
Athletes have a natural affinity for crypto for the same reasons most people do, and their fans are following closely behind.
Do Sports Fans Love Crypto?
Crypto might be a relatively new concept, but sports fans know their way around the market better than most.
According to Morning Consult,
47% of sports fans said they are familiar with cryptocurrency; 27% said they currently own some
66% of self-proclaimed “avid” sports fans and 72% of sports bettors said they’re familiar with cryptocurrency
Men are about twice as familiar with cryptocurrency as women, and 3 times as likely to own some. With sports betting and fantasy sports on the rise — I only expect these numbers to increase over time.
Although there was a large drawback of crypto commercials during this year’s Super Bowl, don’t expect that to be the norm in the future.
While there will be some reservations from some brands, the flood of crypto-related marketing partnerships in the sports industry seems destined to continue for the foreseeable future.
What Does The Future Hold?
Let’s be honest, the cat is out of the bag. The mainstream might not understand it at this moment, but crypto, NFTs, and the metaverse are here to stay, and the world of sports is naturally alignment with these concepts and blockchain technology.
In fact, I believe the relationship between athletes x fans x crypto will continue to grow immensely, even in light of the recent setbacks.
Since the early 2022, within sports we have already started to see:
Teams exploring tokenomics and blockchain ticketing
The future isn’t coming, it’s here.
After all, ask yourself, “When has innovation ever moved backward?”
It’s great to see that the conversations about crypto and web3 span beyond social media platforms and group chats. They happen in locker rooms, at the bar, and of course, IRL. But there’s still a lot of work to be done to make this space more approachable and safe for everyone to participate in.
If you enjoyed this piece from Malcolm, check out his newsletter at The Hype Report and follow him on Twitter.
See you next week!
Collect this post as an NFT.
