F1: The vertigo of cryptocurrencies: hundreds of millions in the air and worrying precedents

Liberty Media and eight teams on the grid, pending their juicy contracts with companies as ambitious as they are volatile.

The return to American soil represents an incentive for Liberty Media, the company that owns Formula 1, which this weekend is preparing its best clothes in Austin. Only five months have passed since the triumphant premiere of the Miami GP, but Stefano Domenicali maintains its ambitious expansion plan in the Circuit of the Americas, which is not even going to be altered due to a devalued closing of the championship. Leaving aside the second title of Max Verstappen and litigation over Red Bull’s budget cap, the F1 CEO intends to revalidate his recent success in Florida in Texas and, incidentally, pave the way to Las Vegas, which will debut on the calendar in 2023. However, all these projects could come to a halt because of cryptocurrencies.

In the late spring of 2021, Domenicali closed a sponsorship deal with crypto.com, one of the leaders in the sector, which at that time had 10 million customers and whose value was estimated at 1,000 million euros. Over five years, F1 would receive close to 90 million, a figure only lower than that of the Aramco oil company. A few months later, Kris Marszalek, CEO of the Singapore-based company, confirmed another nine-year contract with the Miami GP. The alliance between cryptocurrencies and the Great Circus was a fact.

Today, the situation of this market, as accessible as it is volatile, has turned around. If it serves as a reference, since March 9, when the World Cup warmed up in Bahrain, the price of bitcoin It has gone from 41,929 dollars to 19,184 that were paid yesterday. Throughout 2022, this reference currency already accumulates losses of more than 50%. The abrupt closures and scandals of various platforms have spread panic among investors. Without going any further, crypto.com, one of the giant exchange houses, has had to lay off 2,000 employees, 40% of its workforce. At the height of the wave they had convinced the Los Angeles Lakers to rename the Staples Center for 20 years for 615 million euros, but last September they had no choice but to cancel another delirious offer to the Champions League.

“It has come to stay”

The threat of collapse is added to the ghosts of fraud and the pyramid scheme. Not only for Domenicali, but also for eight of the 10 teams on the grid, those that maintain a commercial link with the crypto universe. From Red Bull, absolute dominator of the World Championship, to AlphaTauri, which has only added seven points in the last 10 races. Only the two weakest teams are left out of the distribution of the cake -perhaps beyond his will-: Haas and Williams.

The enthusiasm for easy money has logically spread throughout the paddock. Since toto wolffhappy to stamp the FTX logo on their Mercedes, until Zack BrownCEO of McLaren. “We are talking about something huge, which is here to stay,” Brown came to admit, without blushing when declaring himself “fascinated and enthusiastic” about cryptocurrencies. Famous for his entrepreneurial courage, the American tycoon had sealed a multi-year contract with Bitci in June 2021. Just eight months later, the Woking team considered it extinct. The Turkish company, the same one that had left MotoGP or the Spanish Football Federation in the lurch, had vanished without a trace. The same disappointment as that suffered with Iqoniq, a cryptoactive platform that declared bankruptcy at the beginning of the year.

Nobody has wanted to be left behind and the bubble threatens to leave more victims along the way. Red Bull, a pioneer in these adventures back in 2019, paid for the hazing with FuturoCoin, but last February it relied again on Bybit’s promises, estimated at 150 million dollars. This financing, for the sake of giving an example, should be completed both in cash and in tokens. Ferrari decorates its rear spoiler with the Velas sticker and Alpine reserves a preferential slot in its chassis for Binance, the largest cryptocurrency company on the planet. “It is going to offer us new possibilities. On a personal level I am totally in favor of it, since it opens a new era. It shows that F1 is modern and is not stuck in the past,” he analyzed. laurent rossiCEO of the French squire.

Not even Fernando Alonso, the most veteran of the grid, can remain oblivious to these ups and downs of the digital universe, more typical of unscrupulous young people. The future of the man from Oviedo with Aston Martin is also linked to crypto.com. And if you want to find out the evolution of the token of the British luxury brand, the house’s own website offers a revealing graphic. Since July 2021, its value has plummeted from the initial $9.45 to yesterday’s $0.42.