Crypto.com has officially entered the sports event trading market, marking a significant move for the cryptocurrency exchange. The company is now offering a regulated platform where users can trade predictions on the outcomes of major sports events, such as Super Bowl LIX. See the full announcement here.
This innovative product, available on the Crypto.com website and app, allows users to purchase contracts predicting the outcomes of games. The platform operates under the oversight of the Commodity Futures Trading Commission (CFTC) through Crypto.com | Derivatives North America.
In a statement, Crypto.com CEO Kris Marszalek highlighted the uniqueness of the offering, stating it is the first regulated product of its kind in the U.S., allowing users to trade their sports event predictions.
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How It Works
Sports event trading differs from traditional sports betting. Instead of using American odds, this system revolves around implied probabilities. For instance, a team with a 50% implied probability to win has its contract priced at $50. These contracts can be traded, allowing users to manage their positions as prices fluctuate based on live events.
Crypto.com’s platform distinguishes itself by enabling users to fund trades with digital currencies. Customers can convert any of the 350 cryptocurrencies available on the platform into Bitcoin or U.S. dollars to purchase these contracts. Payouts are made in U.S. dollars.
Competition in the Space
Crypto.com isn’t the first player in the sports event trading market. Companies like Sporttrade have already popularized this concept, emphasizing its simplicity and potential for higher payouts. The new platform from Crypto.com, however, integrates cryptocurrency into the mix, making it a standout among competitors.
Other financial services firms are also exploring opportunities in event trading. For example, Robinhood, the popular commission-free trading platform, has expressed interest in entering the sports betting market, signaling potential competition for Crypto.com.
The Growing Popularity of Event Trading
The event trading market has seen a surge in popularity, with platforms like Kalshi and Sporttrade paving the way. Political betting has been a major driver, but sports are becoming a significant part of this growing industry.
For Super Bowl LIX, Crypto.com users can trade “yes” or “no” contracts on the 19 NFL teams still in playoff contention. For example, a “yes” contract on the Detroit Lions winning the Super Bowl is priced at $22.25, reflecting their 22% implied probability of victory. Similarly, the Kansas City Chiefs have a comparable price, showcasing the excitement this platform brings to sports fans.
Knup’s Take
Crypto.com’s move into sports event trading is a bold and timely step. By merging cryptocurrency with sports, they’re appealing to tech-savvy fans looking for alternative ways to engage with games. The CFTC regulation ensures legitimacy and could attract users hesitant about unregulated markets.
However, Crypto.com faces challenges in standing out amid growing competition. While integrating cryptocurrency is a novel feature, platforms like Robinhood have a loyal user base and could quickly dominate the space if they fully commit to sports event trading.
This new product aligns perfectly with the shifting landscape of sports and tech, and if Crypto.com executes well, it could cement itself as a leader in this emerging market. Only time will tell if this venture proves as revolutionary as it promises.
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