Crypto park deal has winner’s curse

Crypto-platforms have quite a few competitors, and some of them are very valuable

  
A representation of virtual currency Bitcoin and small toy figures are placed on computer motherboard in this illustration taken January 7, 2021.

A representation of virtual currency Bitcoin and small toy figures are placed on computer motherboard in this illustration taken January 7, 2021.

REUTERS/Dado Ruvic

(The author is a Reuters Breakingviews columnist. The opinions expressed are their own.)

NEW YORK - Cryptocurrencies have arrived at the ballpark. Crypto.com, a Singapore firm that allows users to buy, sell and pay with cryptocurrencies, is paying $700 million over 20 years to slap its name on Staples Center in Los Angeles, according to two people familiar with the deal. At $35 million a year, that’s among the priciest deals ever.

It’s possible it makes sense for now. Crypto-platforms have quite a few competitors, and some of them are very valuable. Crypto.com is private, but rival Coinbase Global is worth $89 billion. Publicity might lead to snowballing popularity before valuable dominance in the market is cemented.

Still it turns out that stadium naming has a pretty poor batting average. A baseball stadium in Houston, once named after defunct company Enron, now carries the label of juice-maker Minute Maid. The home of the Philadelphia Flyers, previously Wachovia Center, is aptly named the Wells Fargo Center. Even Staples is scrapping by in a paperless world. So splashing a corporate logo on a sports stadium may be relatively fleeting. Hubris, however, is eternal. (By Robert Cyran)

(The author is a Reuters Breakingviews columnist. The opinions expressed are their own.)

(Editing by Lauren Silva Laughlin and Sharon Lam) ((SIGN UP FOR BREAKINGVIEWS EMAIL ALERTS: https://bit.ly/BVsubscribe))


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