Nowadays the world of sports and finance have become forever synonymous with each other. The talks of how much an athlete is worth, potential trades and other hubbubs of the financial sports sphere have become commonplace in sport from both a fan and athlete perspective.
Yet in the early hours of Sunday morning UK time, Ultimate Fighting Championship (UFC) heavyweight Francis Ngannou helped flip the world of sports business on its head.
The Cameroon native, 35, became one of the first athletes to be paid partly in cryptocurrency. This coincided with the UFC’s recent partnership with crypto.com, and the release of the organisation’s first NFT collection.
But what are cryptocurrencies and NFT’s, and how did they infiltrate mainstream sports?
Explaining Cryptocurrencies and NFTs
First off, it’s probably a good idea to explain what both cryptocurrencies and NFTs are.
Cryptocurrencies are a form of currency that exist solely online. Unlike the currencies that the majority of the population uses, cryptocurrencies are unregulated and are not controlled by the banks.
People invest ‘real’ money into various cryptocurrencies in the hope that they increase in value. They’ve become big business, and as of 2021 Bitcoin – the most well known cryptocurrency of them all – had a value of $61,000 (£51,000) per one Bitcoin.
NFTs on the other hand (or Non-Fungible Tokens) are the new kid on the block. In short, people buy the ownership of unique digital files which can come in the form of memes, artwork or drawings.
They’ve become hot property online, and in 2021 an NFT called “every day’s – the first 5,000 days” sold for $69 million (£51 million) in an online auction. This made Mike Winkermann – or Beeple as he is known online – among the top three most valuable living artists.
How Crypto and NFTs made their way into sports?
Cast your mind back to January 2020, and while the world was preparing itself for the ensuing coronavirus pandemic, NBA Point Guard Spencer Dinwiddie was about to set off a domino effect that would change the sporting landscape forever – whether he knew it or not.
Dinwiddie, then 26, decided that part of his contract with the Brooklyn Nets would be tokenized online with fans able to partially buy it. The sale of Dinwiddie’s tokenized contract raised $1.3 million with shares worth $150,000 a piece.
That July, Dinwiddie found himself disappointed with just 10% earned of what his team initially thought he’d raise. But regardless, history had been made, and thus set in motion the NFT boom in the sports world.
On the cryptocurrency side, with the world standing still in the wake of the coronavirus pandemic, the trillion dollar sports industry began to crack under the economical pressure with the lack of action. Leagues were suspended, and both content, engagement with fans, plus finances, were hard to come by.
But in the world of Cryptocurrency, things had never been better. The lack of goings-on in the world meant people were seeking new ventures, and among gardening, running and knitting, learning and investing in crypto became a top lockdown hobby.
Keen to expand their reach beyond their online confines, cryptocurrency companies began sponsoring sports leagues and organisations. Naturally, the eSports gaming market was among the first beneficiaries.
Twitch streamer and eSports personality Susie Kim launched her own cryptocurrency in 2020, called SUSIE, one of the first entries of crypto into eSports. Very soon, some of the most popular streamers on Twitch (an online streaming service with a focus on video games) began to find themselves being offered sponsorship deals with cryptocurrency companies.
But with the return of major sports drawing near, cryptocurrencies and NFTs were about to expand beyond their purely online nature.
Breaking into the real world
With the likes of NFL great Tom Brady, Golden State Warriors star Steph Curry and UFC middleweight champion Israel Adesanya publicly supporting the rise of crypto and NFTs – with Curry and Adesanya making their highly coveted NFTS their profile photos on social media – the online revolution had well and truly begun.
Looking to cash in on the recent boom, the NBA executives hatched a plan that would take NFTs into the hearts and minds of the average basketball fan’s public consciousness.
In 2021, America’s premiere basketball organisation announced it would be selling NFT’s of some of it’s biggest stars online branding them: “NBA Top Shots.”
In short, it would take some of the most iconic moments in the sport and release them online via limited quantity packs.
Essentially, packs meant that users wouldn’t initially know what they were buying, but it was that risk-versus-reward factor that drew fans in. Eventually, users would be able to search for certain players and organisations through a marketplace similar to that of EA Sports FIFA Ultimate Team mode.
It was a hit, with a LeBron James NFT hitting a dunk to honour Lakers’ great Kobe Bryant selling for over $230,000 at auction.
Fans were investing fast. Badges, players and moments in the NBA weren’t just idle images but represented far more than that. They are memories, unity, identity and so much more.
To own one of a kind moment from the likes of Michael Jordan or Kobe Bryant (though a Bryant NBA Top Shot NFT is yet to be released) keeps their playing careers, legacies and lives alive. An enticing prospect for any basketball fan.
Meanwhile, cryptocurrencies also saw a similar boom in the sports world with the aforementioned UFC making crypto.com it’s official fight gear sponsor in a $175 million deal.
But the biggest was yet to come as the Lakers announced crypto.com had won the naming rights to their stadium for the next 10 years in a near $700 million deal. Crypto.com’s foray into sports was not over, also seeing a major sponsorship deal with French football giant Paris Saint-Germain; their first major investment in European football.
In the space of one year, NFTs and crypto had gone from just a niche hobby spoken about in hushed whispers among industry experts to infiltrating some of the largest sports organisations in the world.
The UFC and Ngannou cash in
So that brings us to 2022. Keen to emulate the NBA, the UFC announced in late 2021 it too would be releasing its own NFT project titled “UFC Strike” at 12pm PST (or 8:00 pm GMT) on Saturday, January 23. Each pack costs $50 (£36) to purchase with 100,000 initially released. At the time of writing the UFC have sold out but plan to release more in due course .
Just this week, Ngannou has been seen sporting a chain donned with a digital screen displaying one of his “UFC Strike moments.” The heavyweight has certainly made a heavy splash in the NFT and crypto market.
In addition Ngannou, in a partnership with company Cashapp, would see half of the $600,000 he would make from his fight with Ciryl Gane converted into Bitcoin.
The UFC and Ngannou have a strange relationship. Long has the African heavyweight felt disrespected by UFC president Dana White. His fight with Gane – his final matchup on his current deal – marks the final time Ngannou would fight for $600,000 – or so he claims.
Feeling slighted compared to the salaries of the likes of Conor McGregor and Jon Jones, Ngannou could see significant return of his $300,000 investment in Bitcoin.
Despite hailing from Cameroon and rising up through poverty, his adoption of cryptocurrency is a huge forward-thinking move. It’ll be time before we see an athlete paid entirely in crypto, but regardless perhaps Ngannou’s boldness in the crypto market is a sign that that day may be closer than we think.
