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Tom Brady joins FTX as brand ambassador

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Decrypt Editor-in-Chief, Dan Roberts, joins Yahoo Finance to discuss Tom Brady and Gisele Bundchen’s transition into the cryptocurrency market after taking a stake in crypto company FTX and what this could mean for the future of the crypto space as more athletes and sports transition.

Video Transcript

[MUSIC PLAYING]

MYLES UDLAND: Hi, welcome back to Yahoo Finance Live on this Wednesday morning, where the world of sports and crypto continue their collision of sorts, maybe an arranged marriage happening along the way here for both camps.

And Tom Brady has really been at the center of the action. And earlier this week talking about his stake he is taking in FTX, his partnership here, the crypto space. Last night, Brady appearing on Twitter spaces with Sam Bankman-Fried to talk about his involvement here. Dan Roberts joins us now. He's the Editor in Chief over at Decrypt.

And Dan, let's just start with the Brady stuff from last night, what you make of Brady's involvement here, how sincere it is. And then we can get into whether these sports tie-ups are actually driving interest and customers to the crypto space.

DAN ROBERTS: Well, guys, great to talk to you. Great to be back on. If you're a crypto company, and specifically an exchange like FTX which is hoping to bring newbies into the space, there are a lot of people right now more than ever before out there who are ready to buy some Bitcoin or some ETH. They're ready to dip a toe in. You are trying to gather up those people and do customer acquisition and get your name brand out there, what person can be better from the sports world than Tom Brady, right?

So Tom Brady and Gisele Bundchen have taken an equity stake in the company. And Brady will be a brand ambassador. They're not sharing the details here. But it's not Brady's first foray into crypto. He also recently launched an NFT platform called Autograph. Of course, look, he has a whole team of people who make these decisions for him and decide every inch of what comes out of Tom Brady's social media. So I'm not that convinced Brady himself is a big crypto guy per se. But it's a big coup for FTX.

And last night in that live chat with Sam Bankman-Fried, Brady said that he wants to be a pioneer in this space, which again, makes for a great headline. I don't really know what it means at the end of the day. But you could see Brady do more stuff with crypto companies. For FTX, it's just the latest in a long string of sports fans by that company to get its name out there.

MYLES UDLAND: Yeah, I think Sam Bankman-Fried's a pioneer in the crypto space. I'm not sure Tom Brady is going to qualify for that. Now, FTX, which is Bankman-Fried's company, they made a big play. I think sponsoring the Miami Heat's arena with the title sponsorship is a huge deal. That's real money behind that deal. We've also seen sports figures like Trevor Lawrence. I don't exactly even know-- I couldn't keep track of what he is or isn't doing. But he's lending his name to some, sort of, crypto theft situation.

And you wrote in a column last weekend about whether this really drives the needle. And it seems like crypto people are admitting it may not necessarily. But they're saying we have marketing dollars to spend, maybe this isn't the worst thing we could do with them.

DAN ROBERTS: I think these companies are flush with cash, especially FTX. There was a bit of a mic drop comment that Sam Bankman-Fried made to me at a summit a couple of months ago where I said to him, Sam, your company hasn't even existed for three years yet and you've just signed a deal with the Miami Heat. That is a contract for 19 years. How can the Heat and how can the NBA be confident that FTX will exist for 19 years?

And he said, it's been a really good year for us, frankly to the point where we could pay the full 19 years right now. So OK, they've got a lot of money. Now, that doesn't necessarily mean that it's going to pay dividends. It's hard for me to imagine a scenario where a Miami Heat fan walking to the arena looks up and goes, FTX, what is that? And then they look at it and go, oh, it's a place where I can buy Bitcoin. I've been thinking about buying Bitcoin and then they become an FTX customer.

That's of course, the scenario FTX is betting on. I'm sure there will be a few examples. And by the way, it's a long game. We're not going to know for years how successful it is for them. It's hard to tell after just a month.

But you mentioned Trevor Lawrence. Now, FTX also made a deal with Major League Baseball where every ump is going to have a patch on their uniform that says FTX. That is certainly a great brand exposure. I'm sure you'll see more social media mentions of FTX. But will it spur directly customer acquisition? I'm not so convinced.

BRIAN SOZZI: Dan, we used to sit next to each other in the Yahoo Finance newsroom. What's the next hot story in crypto I need to be covering but I'm probably not covering? What's the chatter?

DAN ROBERTS: It's got to be De-Fi, Soz. And look, it's a opaque, confusing environment. It's very new and nascent. Tons of money is pouring in. At the peak, about a month ago, more than $100 billion was locked up in De-Fi protocols. We talk about TVL, total value locked. That's gone down a little since then. And, I guess, the two things I'd tell you to keep in mind here, it's like the Wild West. It's fast and frenzied. It's cool. It's interesting, De-Fi.

But number two, for now, even though the money is big, the number of individual users, traders using De-Fi protocols is still pretty small. It's like under 5 million. And it's really crypto natives. I think the vast majority of retail traders they're not dipping a toe into De-Fi yet. It's way too hard. There's too much friction there. They've barely begun to trade Bitcoin and ETH, but it'll get there. I think De-Fi is worth keeping tabs on.

MYLES UDLAND: Dan, when you were here at Yahoo Finance, you covered crypto as well but also the sports business. It feels like sports is chasing you into this new crypto world. Does it seem like it's just the beginning of a continued march for more sports leagues to have more crypto tie-ins? Top Shot thing came and went. I'm not exactly sure where the NBA is at with its NFT push. I guess we're not talking about actual basketball. But does it seem to you like sports and crypto are going to deepen this relationship, or is this a faddish spring of 2021 type thing?

DAN ROBERTS: I think they will deepen the relationship. But you have to define your terms. There are companies throwing money at the wall because they have marketing money to spend, and they're doing it in sports, fine. There will be a shaking out there. We'll see how successful that is.

And then there are sports companies, and especially in sports betting, where the convergence of crypto makes the most sense because there's a gamification feel to crypto, especially to De-Fi. In that area, you have companies like DraftKings that have now offered NFTs as prizes in their fantasy contests. So the whole DraftKings, FanDuel story is also chasing. I just can't escape them.

Just this morning, guys, Jason Robins, the CEO of DraftKings tweeted out, "Which crypto punk should I buy?" And crypto punks are, kind of, ancient rare valuable NFTs that just look like pixelated faces. It's all probably pretty silly to someone who doesn't know about it or doesn't understand it. But I think this will continue.

For some of these crypto companies, they just want to get their name brand out there. And one thing I always tell people to remember, in the crypto world, we talk about Binance, Gemini, FTX, some of these companies that to us are big names. But I always tell our staff at Decrypt, in the outside world, none of them are well-known names yet. Even Coinbase is probably the closest thing to a household name. But I'm not sure most people who don't care about crypto have even heard of Coinbase. So everything is still very early is what I'd say about that.

BRIAN SOZZI: Dan, we've been talking a lot about on the shows about crypto jobs are hard to fill right now. Now that you're the head chief over there at Decrypt, is it hard finding people to write credibly on the crypto space right now?

DAN ROBERTS: Well, it's an insidery media question, but I'm happy to talk about. The biggest problem in crypto media, it's two-fold, right? One, you do have some people who are bag holders. And whether they admit it or not, they're writing about this stuff because they hold a lot of it and they like it, and they want to see the prices go up. That is not us at Decrypt. We have a very neutral view. And all of our writers disclose their actual holdings.

But the second problem you see is a lot of crypto sites have a ton of jargon. And they really are addressing an audience of people who are already crypto experts. And at Decrypt, and just like you guys do at Yahoo Finance when you cover crypto, we really try to speak to new entrants to the space, the people who are crypto curious, they don't know all the terms and acronyms yet.

So all that, I guess, a long way of saying crypto is very hot. Every media company wants to write about it and explain it right now. But there's a reason that crypto writers who have a neutral, unbiased view and can explain things cogently for a layperson are in high demand.