BlockFi announced this week that it scored a prominent new partner in NBA player Cade Cunningham, recently picked first overall in the 2021 NBA Draft by the Detroit Pistons. It’s a familiar story to crypto industry watchers, as another firm inked a similar deal with the top NFL pick back in April.
Back then, Trevor Lawrence—picked first overall by the Jacksonville Jaguars—signed a similar endorsement deal with Blockfolio, which has since been renamed to match the brand of its owner, rising exchange FTX. The multi-year, multi-million-dollar deal included a “significant signing bonus” for Lawrence paid out in Bitcoin, Ethereum, and Solana into his account.
Cunningham will feature in content for BlockFi over the course of the multi-year arrangement, covering topics such as financial literacy and crypto education. Terms of the deal were not disclosed, however Cunningham will receive a “signing bonus” in the form of Bitcoin paid into his BlockFi account.
FTX has had a banner year so far in 2021. While the wider cryptocurrency market swell has lifted many boats in the space, FTX has emerged as a rising star. The exchange boosted its valuation to $18 billion in July following a $900 million Series B funding round, and amidst surging sponsorship spending, it has also seen soaring web traffic even as the markets suffered earlier this summer.
Just like FTX with Lawrence, BlockFi surely hopes that Cunningham’s rising profile will help spread awareness of the brand and its products. BlockFi is one of the leading crypto-driven lending services, and is known for its crypto savings accounts that pay out interest on holdings of Bitcoin, Ethereum, and other assets. As the top pick, Cunningham is guaranteed to have a lot of eyes on him in the years to come.
"Once you start to see names like Trevor Lawrence, and prominent people in entertainment, the taboo is officially shattered,” FTX COO Sina Nader told Decrypt in April. “People are realizing that crypto is a real thing."
Uniquely, however, BlockFi could probably use the positive awareness right about now. The firm is currently dealing with a swirling regulatory storm, with regulators from five U.S. states recently alleging that BlockFi’s crypto interest savings accounts are actually illegal, unregistered securities offerings.
New Jersey, Alabama, Texas, Vermont, and Kentucky have all taken action against the firm over the last month in the form of cease and desist or show cause notices. It’s a cloud hanging over an increasingly popular service for existing crypto holders and new investors alike. BlockFi maintains that its savings accounts are not securities offerings, but the firm has stopped offering new accounts in Kentucky—and New Jersey’s deadline is nearing.
Whether BlockFi’s endorsement deal with Cunningham helps the brand weather the bad buzz around regulatory scrutiny remains to be seen. In the case of pairing with a prominent athlete, what also remains to be seen is whether this deal will be the tip of the iceberg for BlockFi, following the lead of FTX and its sports spending spree this year.
FTX sees a clear market of potential crypto investors in the sports space and is hitting it hard. In addition to the Lawrence deal, FTX sponsored the Miami Heat’s arena in a 19-year $135-million naming rights deal, became Major League Baseball’s official crypto sponsor with an FTX patch on umpires’ uniforms, and made NFL star Tom Brady a brand ambassador alongside an equity investment from the quarterback and his wife, supermodel Gisele Bündchen.
FTX is even digging into esports, signing popular competitive organization TSM (now TSM FTX) to a 10-year $210 million deal and then later sponsoring League of Legends esports competitions in a seven-year deal. (BlockFi had a brief partnership with esports team NRG that was announced in November, but the firm is no longer listed as a team sponsor.)
— SBF (@SBF_FTX) August 12, 2021
If FTX’s goal is increased brand awareness and driving more people to its exchange, then the early signs are promising. Data from ICO Analytics (citing SimilarWeb) from July 2021—as tweeted by FTX CEO and founder Sam Brinkman-Fried—shows web traffic to FTX up 66% on a month-over-month basis. No other exchange even comes close to that mark during the span. In fact, the vast majority of the exchanges saw diminished traffic amidst the summer market doldrums, as prices continued to sink before a late-month uptick that then roared into August.
BlockFi would surely be happy to see that kind of outsized growth too, but it also has a brand image to try to maintain amidst potentially damaging regulatory battles ahead. It’s not clear yet how effective crypto marketing is on sports fans, but FTX has pushed harder into this space than any other industry firm—and their numbers are rising right now.
The Cunningham deal could well prove to be an isolated endeavor rather than the first step in a wider sports marketing push. But given FTX’s apparent success so far in the space, it could be tempting for BlockFi to try and mine similar interest and sentiment from sports.