Will Crypto Gain More Strength as Fiat Currencies Weaken?
The crypto market experienced a bullish Friday morning last week, with Bitcoin (BTC) rising 2.4% to surpass $27,000 and Ethereum (ETH) increasing by 3.3% to go above $1,650.
Factors contributing to this surge included news of an Ethereum futures ETF by VanEck and a 2% rise in the S&P 500 index; $80 million in short liquidations, and a weakening US dollar. As a result, the total crypto market cap grew by 2.2%, adding nearly $25 billion; with various cryptocurrencies, including Sui Network (SUI) and PepeCoin (PEPE), leading the gains.
Despite frequent turmoils like this, many are still in favour of virtual currencies, especially Bitcoin. The cryptocurrency, created in 2009 by Satoshi Nakamoto, is a decentralized digital currency operating on blockchain technology. It offers peer-to-peer transactions, disrupting traditional finance and serving as a store of value, medium of exchange, and investment asset.
With those potential advantages; some bet that Bitcoin will eventually be able to replace fiat currencies like the Euro and US Dollar.
Bitcoin benefits
Bitcoin offers several advantages over traditional fiat currencies. Firstly, it boasts lower transaction costs, particularly for international transfers, compared to traditional financial institutions.
Its accessibility through an internet connection helps provide financial services to the unbanked or underbanked populations. The transparency of the public Bitcoin blockchain enhances trust as users have full control over their funds without the risk of third-party freezes or confiscations.
Furthermore, Bitcoin’s capped supply of 21 million coins makes it resistant to inflation, a concern for many fiat currencies. Its digital nature ensures portability; allowing users to carry large sums in a compact hardware wallet or even memorize a passphrase for worldwide access.
Bitcoin operates on a decentralized blockchain network, making it resistant to political interference and manipulation. Additionally, its transactions are highly secure due to cryptographic techniques, making unauthorized alterations difficult.
The usage of pseudonyms is also a plus for those looking to do financial transactions in grey areas; such as online gambling, which some jurisdictions allow and some do not. Sports fans can find bookmakers supporting Bitcoin sports betting when they want to bet on their favourite team without exposing their personal information. The fact that many of their favourite star players also embrace the technology is also another driving factor.
Blockchain and sports
Sponsorship has always been a big part of the improvement of sports communities. Even the biggest championships, like the UEFA Champions League, are not immune to this. These recent years, crypto has been a big part of this scene.
For instance, French soccer club Paris Saint-Germain F.C. is partnering with cryptocurrency exchange sponsor Crypto.com to release NFT matchday posters co-created with generative AI artist Benjamin Benichou. These limited edition posters, totalling just seven out of 1,970 incarnations; will be displayed during PSG’s matches and released as NFTs for fans to collect.
Meanwhile, cryptocurrency exchange OKX signed a deal to expand its partnership with Manchester City back in June; becoming the official sleeve sponsor of the club in a deal worth over $70 million over three years.
OKX branding will feature on both men’s and women’s first-team playing jerseys. This marks the third deal between OKX and Manchester City, following their initial partnership in 2022; with OKX also securing other sports sponsorships.
However, prior to these successful stories, blockchain platform DigitalBits missed the opportunity for global exposure to up to 400 million viewers as it failed to meet sponsorship payments to Inter Milan, resulting in the removal of its logo from the team’s kit in April.
DigitalBits’ sponsorship deal with Inter Milan, initially valued at €85 million ($100 million), ultimately faced financial challenges, leading to the termination of the partnership. Despite this setback, streaming service Paramount+ stepped in to present its logo on the shirts for the Champions League final against Manchester City.
Conclusion:
A similar story happened to the Argentine Football Association (AFA). Cryptocurrency exchange Binance terminated its sponsorship deal with the association in July amid ongoing legal troubles and cost-cutting measures. However, according to Binance, the five-year deal, rumoured to be worth $8 million annually, was dissolved due to the AFA’s failure to meet its contractual obligations.
In the midst of tightening regulations and increasing scrutiny, the crypto world may face hurdles, but it’s far from a dead end. While regulatory challenges are real, they also signal a growing recognition that might eventually turn into acceptance.
