Sports Warming Up to Cryptocurrency Market with Winners' Prize Coming in Bitcoin

The world of sports is finally entering the cryptocurrency market with gusto with chess, basketball and football starting to do dealings in bitcoins. Next week, FTX Crypto Cup, the richest ever online chess tournament with 320,000 dollars prize money, will see the Top 10-ranked players in action and they have been promised massive bonus in bitcoin. When the tournament was announced on May 17, the value of the prize money was 100,000 dollars but the ever-fluctuating bitcoin value means there is a certain amount of excitement and intrigue around the real prize money on offer.

This is not the first time bitcoins are at the forefront of payment in sports. The English Premier League team Southampton has made public a part of its player contract where there is an “option for the club to be paid certain performance-based bonuses in Bitcoin at the end of each season, allowing the club the opportunity to take advantage of the new, high-growth currency if it feels it will bring significant future benefits”. Apart from this, since 2014 NBA franchise Sacramento Kings has been paying a part of its players’ salary in bitcoin.

While Southampton’s sponsors sportsbet.io trade in cryptocurrency, there is a bitcoin logo on the sleeves of Watford, who have qualified for the Premier League from Championship this season. Last January, former Real Madrid graduate and Levante striker David Barral signed with Segunda B side DUX Internacional de Madrid on a deal based solely on cryptocurrency, thus becoming the first player to do so.

eToro’s (a cryptocurrency platform that has ties with several Premier League clubs) UK managing director Iqbal V. Gandham said in January to the Sun that “within about six to twelve months we will see a player transfer in the Premier League completed using bitcoin.” He believes this will happen due to the skyrocketing market prices of the players as it helps eliminate third-party ownership of players.

During the 2018 Russia World Cup, FIFA and UEFA even accepted ticket payment in cryptocurrency calling it a safe and transparent mode of payment.

Coming back to FTX’s chess tournament, there will be a live display of fluctuating bitcoin value on the tournament website, which will give the players and the fans a look at the constantly changing bonus for the winner – something that is likely to increase the hits on the website as well. It doesn’t matter the starting value of the prize money, what would eventually matter is the bitcoin value on May 31, the last day of the tournament.

Andreas Thome, CEO of the Play Magnus Group, called the Crypto Cup a path-breaking event. “We, along with many chess players around the world, have been following cryptocurrencies for many years and are passionate about celebrating this fast-growing industry,” he said on the tournament’s website.

Sam Bankman-Fried, the chief executive of FTX, said to Reuters, “In a number of ways you know the chess demographic overlaps a fair bit with the cryptocurrency demographic in terms of people who tend to be technologically sophisticated, younger and quantitative, and so I think you know while crypto’s appeal is definitely broadening quite a bit, you know that it still does remain the demographic that is most amenable to it.”

Dutch Grandmaster Anish Giri told chess.com: “It’s like playing with the house money right? You’re getting it for pretty much nothing, it’s also a bonus added to the prize fund. It’s a good thing, it’s here to stay. I don’t have an account, but I’m planning to get one soon.”

In the world of chess, former world champion Garry Kasparov has been a major advocate of cryptocurrency. Two months ago, he told Forbes, “Anything that can offer us the opportunity to take back control or some control of our privacy is always welcome. It’s a response to the shift of power from individuals to states or other institutions that may act on our privacy without our consent. As with any new technology, it’s not inherently good or bad. It depends on who’s using it and for what purpose. You can use nuclear technology to build a bomb or a reactor.”

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