Mercedes looks almost certain to lose one of its sponsors – FTX – as the Crypto Exchange company faces financial catastrophe.
The crypto exchange FTX saw investors withdraw over $6 billion in the past three days, the company facing bankruptcy.
As the situation continues to evolve, all indications suggest that FTX could go bankrupt very soon – with the CEO admitting on social media that the situation is grim.
Coming back to how this relates to Mercedes and Formula 1, it seems unlikely that this development will have a big impact on the team.
There’s no doubt that losing a sponsor is embarrassing, but a team of the magnitude of Mercedes are almost certain to have assured that they have already received their sponsorship payment.
Even if not, the German team has more than enough financial muscle to ignore the loss of a sponsor.
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F1’s budget cap has made the sport much more profitable, with titans such as Mercedes drastically cutting spending from previous seasons.
Considering the partners Mercedes is already working with, this development will hardly be an obstacle down the road.
Still, this news raises questions about the longevity of crypto sponsors in Formula 1.
Haas recently announced its own partnership with an NFT group, which means almost every team on the grid now has an NFT/Crypto sponsorship.
The impending collapse of FTX demonstrates just how volatile the crypto space has proven to be, so there can be no assurance as to the viability of crypto sponsors in F1 over the long term.
Despite this, the teams seem willing to take the risk in exchange for money, which is ultimately an essential aspect of running a Formula 1 team.
The NFT world may be slowly collapsing, but it will take longer before teams decide against making deals with crypto companies.
There are plenty of options beyond crypto, but provided the sponsorship payment is made up front, the world of F1 seems relatively out of step with the unpredictability of crypto.
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