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Crypto.com goes long on NFT boom, sports partnerships

Crypto.com CMO Steve Kalifowitz joins Yahoo Finance to discuss Crypto.com's more than $400 million spent in sports adverisements and the growth of NFTs.

Video Transcript

- Let's take a look at crypto, because it certainly is catching investors' attention. Today, Ethereum at an all time high. Bitcoin not too far from its recent record.

Let's talk about the impact crypto is having on the sports world and the link between the two industries. For that, we want to bring in Steve Kalifowitz He's the CMO at crypto.com. Steve, it's good to see you. The recent news and why we're bringing you on is that crypto.com recently announced a partnership with UFC to sell NFTs.

Let's talk first about the excitement that we're seeing around crypto, because right now we have Ethereum and Bitcoin hovering just around all time highs. You're a massive platform. What does this do? Does this bring more users to your site when you look at a rally like we're looking at today?

STEVE KALIFOWITZ: Yeah, absolutely. There are people who have been on the sidelines for a while, waiting to see when's the right time to come in. And certainly when you see different tokens rally, usage goes up.

- When you talk about offering NFTs to all of us regular folk, how do you determine the price of the NFT? I realize there's going to be an auction, but in some places, there's a reserve, I would suspect. So, based on the popularity of the athlete, who determines all that?

STEVE KALIFOWITZ: Yeah, we have a pretty close partnership with UFC that we launched earlier this year. We are their first global fight kit partner, so you see us right on the shirts, on the pants, and the hats, all over the place. So, we have a pretty deep relationship with UFC. They're amazing at merchandising. And so together, we assessed, you know, where's the market at? And this is our first drop, so they were, I would say, aggressively priced, to make sure that early people can come in.

- And you have a number of partnerships within the sports industry, Formula One, UFC, Philadelphia 76ers, just to name a few of them. But that's not even close to the number that you actually have. When you're identifying, though, these partnerships, how do you determine what's the most attractive opportunity? What are you looking for in that team or the league?

STEVE KALIFOWITZ: So, right. We work with teams and leagues, like the Italian Football League. We work with the Montreal Canadiens, even Aston Martin, the Formula One racing team, in addition to the league, Formula One.

Number one is we look for great partners. These are great brands, and we are an amazing brand. And so, we're looking for great brands that we can come together with, and really build a long term partnership, because crypto is a new industry for a lot of people. They've been looking at it for a while and are curious about it, and, you know, the fact that I'm here. More and more people are talking about it.

And so, we want to partner with great brands and great partners who can help us get into conversations and do it naturally. That's the number one thing we look at.

- I think some of us are thinking right now that we're talking to an individual who will be able to buy 20 of us in your future as you are successful. Do you keep tabs-- and I keep going to the NFT thing, because many of us find just NFTs and the concept fascinating, do you keep tabs on the secondary market growth in the value of the NFTs, as people buy and then start trading them the way they trade artwork?

STEVE KALIFOWITZ: For sure. The secondary market is extremely interesting. What makes NFTs different, I think people need to remember, is that NFTs are digitally native content. And each piece is unique and it's verifiably unique, which means that it's not just like a baseball card, which has virtually no utility other than staying on a shelf.

A unique NFT that you own in a digital world is actually a ticket to a club. It's access to events. And that's how we're seeing people start to leverage NFTs. That by virtue of having it, it's cool to own it. But then what can you do with it? And because it's natively digital, it gives people access to things. And that's, personally, one of the things I'm so excited about, and something that we're working on with all of our partners, like the Sixers, like UFC, and other, is once people acquire these things, how do we let the super fans not just feel good about owning it, but actually give them opportunities to access new experiences?

- And Steve, as we wrap this up, I mean more broadly speaking, we talk about the uncertainties when it comes to this sector, this industry. One of them, of course, being potential regulation. What's your view on potential regulation, and whether or not it's needed within the industry?

STEVE KALIFOWITZ: As a company, since the day we were founded, we were built on the premise that this industry should be regulated. We welcome regulation in every market that we operate in. And regulation leads to consumer protection. And we believe in it. We believe that it'll help increase the adoption of crypto overall.

You know, fundamentally, crypto will be the underpinning of the future internet-- Web 3.0, as a lot of people reference it. And it's coming in only a few short years. And it's super exciting, because all of us are going to be able to own it, and build it, and develop it. And so, regulation should come, and we welcome it.

- Certainly there's been a lot of excitement in this space. Again, Ethereum at an all time high today, Bitcoin not too far behind. Steve Kalifowitz, crypto.com's CMO. Thanks so much for taking the time to join us.

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