Mercedes seems almost certain to lose one of its sponsors – FTX – as the Crypto Exchange company faces financial doom.
The Crypto Exchange FTX has seen investors withdraw over $6 billion in the last three days, with the company now facing bankruptcy.
While the situation is still developing, all indications suggest that FTX could go bust quite soon – with the CEO admitting on social media that the situation is bleak.
Returning to how this relates to Mercedes and Formula 1, it seems unlikely this development will impact the team severely.
There is no doubt that losing a sponsor is inconvenient, but a team with the magnitude of Mercedes is almost certain to have ensured that it has already received its sponsorship payment.
Even if this is not the case, the German squad has more than enough financial muscle to shrug off the loss of one sponsor.
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F1’s budget cap has made the sport far more profitable, with titans such as Mercedes significantly reducing spending from previous seasons.
Considering the partners that Mercedes already works with, this development will hardly be a bump in the road.
Still, this news does raise 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 pending collapse of FTX demonstrates how volatile the crypto space has proven, so there can be no assurances about the viability of crypto sponsors in F1 for the long term.
Despite this, teams seem willing to take the risk in return for cash, which is ultimately an essential aspect of running a Formula 1 team.
The NFT world might be slowly collapsing, but it will take more time before teams decide against making deals with crypto companies.
There are plenty of options beyond crypto, but providing that sponsorship payment is made in advance, the F1 world seems relatively unphased by the unpredictability of crypto.
This news is republished from another source. You can check the original article here