The volatile cryptocurrency market nosedived Wednesday. It hit the sports world as well, with athletes from various sports as prominent as Patrick Mahomes responding to the negative news.
Bitcoin was the first digital currency, invented in 2009, but there are nearly 7,000 cryptocurrencies traded now. But overnight Tuesday and early Wednesday were not good for any of those currencies. Valuation plummeted, and a single Bitcoin fell to less than half the value it did in April.
Digitized currency has become more intertwined with sports, dating back to a 2014 sponsorship deal involving a Bitcoin payment processor and a sports events organization. The same processor sponsored a college football bowl game the same year in a first-of-its-kind arrangement.
On Wednesday, Mahomes took to an animated GIF to express his feelings about the collapse while other athletes dug in.
Patrick Mahomes and his crypto involvement
In March, Kansas City Chiefs quarterback Patrick Mahomes launched a virtual art gallery, selling the popular NFTs (non-fungible token). Called “The Museum of Mahomes,” the virtual gallery launched March 17 and sold digital art pieces starting at $2,500 to as much as $15,000.
Part of the proceeds goes to Mahomes’ foundation called 15 and the Mahomies. The Boys & Girls Clubs in Missouri also benefit, according to CNBC.
“I’m looking to break boundaries and make history on and off the field. That’s the great thing about being an athlete these days, you have so many outlets and opportunities to expand your brand and make an impact.”Patrick Mahomes
Based on Mahomes’ Wednesday morning tweet, he felt his brand contracting and reacted to the squeeze. Other athletes have skin in the virtual currency game as well.
Russell Okung in it for the long haul
NFL free agent offensive lineman Russell Okung didn’t take Wednesday’s crash as anything more than a blip. He released several tweets indicating he was doubling down at the lower prices. He’s confident in future gains. That’s not new for Okung; on Sunday, he tweeted that he was investing more while buying what he called “the dip.”
But Bitcoin’s value plunged from a high-water mark near $65,000 last month to below $31,000 at its low point Wednesday morning. Mike Novogratz, a significant investor in cryptocurrency, said per CNBC, there’s no quick fix for the fall.
“Humpty Dumpty never gets put back together in two days … when he cracks. It’s going to take a while. The market will consolidate. It will find a bottom somewhere. I’m hoping it’s close to here.”Mike Novogratz
Novogratz said the bottom could be in the range of $36,000–$38,000. Bitcoin’s value rose above $40.000 later Wednesday.
Spencer Dinwiddle took a different approach in a volatile market
In 2019, Brooklyn Nets guard Spencer Dinwiddie fought the NBA to take a much more direct route into the cryptocurrency market than the path Patrick Mahomes chose. He wanted the right to tokenize his $34 million contract extension, which he was eventually able to negotiate with the NBA. He made 90 tokenized shares of his contract available to buy for $150,000 each. There were 90 available, but according to coindesk.com, only nine of them sold.
Tesla CEO Elon Musk has been at the center of recent rises and falls in Bitcoin fortunes. In February, Tesla revealed it had bought $1.5 billion in Bitcoin and announced it would accept it as payment for its products. Musk reversed that last week, citing environmental concerns. In the first minutes after Musk’s announcement, Bitcoin lost 5% of its value. It’s been sliding downhill since.
However, if you’re like most of us, you know two things: (a) Bitcoin is some sort of virtual money, and (b) it’s out of the comfortable price range even at half its peak price. But sports leagues are taking advantage of the rise in popularity of NFTs. Top Shot, an NBA-licensed digital property, is a trading card system that has already generated gross sales of $230 million, per National Law Review.
Prominent European soccer clubs are offering fan tokens. These tokens don’t represent an ownership stake, but they have proven very popular just the same. FC Barcelona made $1.3 million in less than two hours after making the tokens available for sale.
But Dinwiddie’s situation looms as a cautionary tale for athletes and teams alike. Treading more slowly might make sense because, as the seismic shifts in the digital currency market show, it’s still a risky venture.