Emergence of Crypto and NFTs in Formula 1 (and what it means for F1 collectors)
Congrats to Max and Red Bull on their COTA win last weekend! The 2021 season has been a welcome breath of fresh air and change from the last few years of Mercedes/Hamilton predictable dominance. Recent media comments have observed too that Formula 1’s audience in the US has skyrocketed and a younger demographic in the fanbase is emerging. For F1 collectors, we can see this in the form of new cryptocurrency sponsors to the sport and also Formula 1 teams and drivers starting to offer non-fungible tokens (NFTs) to their fans and F1 collectors for memorabilia or fan experiences. As F1 collectors, we will need to get our heads around NFTs like other sports memorabilia and visual art collectors.
Crypto sponsors in F1
Cryptocurrency firms are definitely more visible now in F1 sponsorships including:
- Formula 1 – Crypto.com (crypto wallet/marketplace) – title sponsor of new 2021 sprint races series and F1 Overtake Award
- Aston Martin – Crypto.com and Socios.com (fan tokens app)
- McLaren – bitci.com (Turkish crypto exchange), Tezos (cryptocurrency)
- Mercedes AMG – FTX (crypto exchange)
- Red Bull Racing – Tezos
- Alfa Tauri – Fantom (cryptocurrency)
- Alfa Romeo – Socios.com
WilliamsF1 were actually first to the blockchain party when they signed a technical collaboration with Omnitude in early 2018. From what I can see Omnitude closed down in 2020. Back in 2019, Red Bull also signed a 2 year sponsorship with Futurocoin (cryptocurrency) but have since linked up with Tezos this year. Yet to see how the $AM and $Sauber tokens via Socios.com app will work for Aston Martin and Alfa Romeo fans.
I’d be curious to find out if the teams are actually accepting cryptocurrency instead of cash.
NFTs in F1
Non-fungible tokens (NFTs) are basically authentication tokens for digital assets like photos, paintings and videos. The benefits of NFTs are supposedly to remove the risk of counterfeiting and enabling a limited edition/copy concept to exist for digital goods.
Will a collector pay a decent chunk of money for a digital photo of Max’s RB16B or Lewis’ W12 backed by a NFT? hard to say. Limited issue photo signed by Max or Lewis and backed by a NFT? more likely, the answer will be yes.
Crypto.com have a marketplace for NFT F1 photos which currently only has a few NFT videos of this year’s Aston Martin AMR21. Some of the bid offers seem incredibly unrealistic though.
There’s clearly a market for limited edition photos but it needs to be part of an accepted platform with an established collectors market – just look at the vibrant after-market for Topps Chrome who have only moved into F1 trading cards since last year (which will be the subject of a post for another time!).
McLaren and Tezos have developed the McLaren Racing Collective – using Tezos blockchain to offer fans NFTs of CAD drawings of 22 components of this year’s McLaren MCL35M that can be assembled to build a 3D model. The first to do so will get a free ticket to a GP – so its a kind of a new engagement model targeted at younger F1 fans (reminds me of Pokemon).
In the NFT space, Pierre Gasly is the real trail blazer in Formula 1 with his ambassador relationship with cryptocurrency Fantom (FTM) which he signed up for in April earlier this year. AlfaTauri’s soon followed by signing up Fantom as an official team sponsor (logo is on the halo) on 14 May 2021 (FTM price then was USD0.69) and at the date of writing this post, Fantom price is now 3.15USD! On the trailblazing front, Pierre has a NFT auction site where fans can use crypto to bid for race memorabilia including Pierre’s mini helmet and VIP meet & greet session and also AT cap and T-shirt. This seems to be a more attractive use of NFTs. 20,000 wFTMs winning bid for his signed Monza 2020 mini helmet! No doubt Pierre should be doing quite nicely with 400% gain in FTM, he might be onto a winner with FTM….
Sister team, Red Bull Racing have a digital collectibles landing page powered by Tezos but at the moment looks to be lacking actual NFT collectibles.
What does this all mean for F1 collectors?
It’s inevitable that F1 punters will soon (if they aren’t already) sports betting on F1 races using cryptocurrencies. Will you be able to buy a BBR, Amalgam or Minichamps diecast using an exotic cryptocurrency? Most likely.
NFTs are a watch this space.
[2022 update: 2022 season launches revealed even more crypto sponsors tying up with F1 teams. Red Bull have picked up crypto title sponsor Bybit (crypto trading platform) in a big 3 year sponsorship deal rumored to be US$150m alongside existing sponsor Tezos. Ferrari SF-75 now has Swiss crypto Velas on its rear wing and nose. Alpine have paired up with Binance (another crypto exchange). I’m sure most of the teams are hoping there won’t be a major cryptocurrency crash any time soon…]
