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Kraken are one of the longest-standing and most used crypto exchanges on the planet. Founded in 2011, they have grown to over 10 million users and were valued at upward of $10 billion in late 2023.

They are regulated in various territories globally and are seen as legitimate by the crypto space, albeit being sued by the SEC for being an unregistered broker-dealer earlier this year. The lawsuit was eventually settled to the tune of $30m.

As per CoinGecko, Kraken is one of the top 5 centralised crypto exchanges in the US by web traffic, with behemoth Coinbase accounting for 75-80% of that. Kraken has ranged from 3.3% to 5.4% US web traffic market share between March 2022 and March 2023, seeing a slight increase throughout the year on average.

Kraken however, is smaller in terms of global market share and global volume — perhaps due to their ‘less relaxed’ attitude on territory expansion and regulation compared to some of their counterparts. An example of this is the lack of availability of the exchange in Japan and other major crypto territories.

Nonetheless, the veteran exchange has now been around to see several crypto cycles, and has built up their customer base and business in a mostly compliant way.

Although Kraken were founded in 2011, they did not seriously enter the sports sponsorship market until 2023, 12 years later.

When FTX collapsed, Jesse Powell, CEO and Co-Founder of Kraken, took to X (formerly Twitter) to criticise the exorbitant spending by then CEO Sam Bankman-Fried. Kraken reduced headcount as a direct consequence of the tailwinds created due to the collapse of FTX, with Powell angry at the irresponsible management of the then-giant crypto exchange, and the impact it had on the broader crypto market.

Several months later, in March 2023, Kraken made their first major move in sports.

They partnered with Williams Racing, the Formula 1 team, making it 8 out of 10 F1 teams in the 2023 season to have a crypto partner.

In May 2024 just over a year after their Williams Racing partnership, Kraken partnered with the rapidly growing crypto combat league Karate Combat, becoming the presenting sponsor of IFC2, during the Karate Combat event KC46.

In July 2024, Kraken turned their attention to football, scoring partnerships with Spanish giants Atletico de Madrid and English Premier League side Tottenham Hotspur, becoming both sides’ jersey sleeve sponsors. In both cases, the crypto exchange was named as the official Web3 and crypto partner.

Many crypto sponsors in this space fail to make their mark beyond simply having their brand on a jersey sleeve, a car or a billboard.

But Kraken have developed and executed some pretty interesting and big activations, leveraging the rights they have to the fullest.

An example of this is the activations they have executed with Williams Racing.

Starting with the Williams Racing Grid Pass, a free digital collectible for Williams Racing fans that unlocks perks, rewards and discounts. The process to claim is simple, fans just need to sign up to Kraken.

Perhaps most notable to the sponsorship from an activation perspective is the Williams Racing Fan Zone, presented by Kraken. The Fan Zone includes a showcar, driver Q&As, merchandise pop-ups and simulators.

Kraken have been creative with Karate Combat also, giving away a $10,000 bonus to a specific fight during IFC 2, that Karate Combat fans voted for.

In the end, almost 5000 unique voters allocated over 1 billion $KARATE tokens in voting, with 58.76% voting for May Chan vs Lykaboss Reed. The Chan vs Reed fight therefore had an additional $10,000 in the prize pool.

Crypto sponsors in sport have been prevalent for years, but when FTX, one of the biggest spenders in the market collapsed in November 2022, it sent shockwaves through the crypto industry, and as a by-product the sports industry as well.

Exploring football more specifically, as these are relevant to Kraken’s most recent partners in Tottenham Hotspur and Atletico de Madrid, there was a huge spike from the 2020/21 season at $12.5m spent by crypto companies across the EPL, La Liga, Bundesliga and Serie A — to just under $100m in 2021/22. This rose again to $175m in the 2022/23 season, coinciding with the peak of the last crypto cycle.

Correlating with the FTX collapse and subsequent market depression in crypto, the 2023/24 season saw this number fall to just under $90m. Ahead of the 2024/25 season, these numbers are likely to consolidate or increase, as several crypto sponsors have announced partnerships in European football over the last several weeks.

In my 2024 Web3 sports predictions piece, I wrote the following:

Crypto sponsorships may not hit the 2022 peaks this year, but it feels like we will approach close to those peaks this year.

Forecasting aside, what is clear is that the days of spending 8 figures on sponsorships for simple branding and exposure are long gone. Blockchains and exchanges want their money’s worth. Kraken’s sports portfolio for example is small and concentrated, and it allows them to spend greater resources on leveraging those partners. Many crypto partners in previous cycles were scattergun in their strategy, meaning there was less time and energy spent on specific partners and fan bases. This meant more money spent on more partners, but perhaps less return on that investment due to the lack of activity driven to these respective platforms and networks.

Another key difference between now and 2-3 years ago is that both sides of these partnerships have wised up to what looks like ‘value’ in these transactions.

There are stories of crypto partners spending huge sums on a slice of sponsorship inventory, and likewise, there are stories of sports brands selling the entire pie to one sponsor. There are now fewer grey areas in these conversations and benchmarks have been set. Sports teams have carved out sponsorship inventory in a way that suits them, and crypto sponsors will only spend where they deem there is value beyond brand exposure.

Further to this, crypto companies are starting to wise up about how to set KPIs against these relationships.

Where do we want to drive usage?

How much of the value here is brand awareness?

How do we integrate without alienating fanbases?

These questions were previously asked after signing on the dotted line, such was the swell of activity and demand for this inventory.

Now, there is more strategy attached to these decisions, which bodes well for activations that involve fans in the future.

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