Posted on: December 23, 2024, 12:11h.
Last updated on: December 23, 2024, 12:11h.
Count Crypto.com as the latest financial services firm to delve into the world of sports event trading.
The cryptocurrency brokerage firm said today it launched a sports event trading product that will allow “users of Crypto.com and the Crypto.com app nationwide to participate and trade their own prediction on the outcome of sports events, including the Super Bowl.”
Sports Events Trading offers an entirely new platform for U.S. users to engage nationwide at Crypto.com and in the Crypto.com app,” said Kris Marszalek, co-founder and CEO of Crypto.com, in a statement. “This unique financial product allows users to trade their prediction on the outcome of a sports event. It’s a fundamentally new concept for sports, and we’re thrilled to be the first regulated platform in the U.S. to offer it to our users.”
The company described the new sports event trading offering as the first of its kind, noting it will be offered by Crypto.com | Derivatives North America, which is regulated by the Commodities and Futures Trading Commission (CFTC).
Crypto.com Brings Crypto to Sports Event Trading
Sports event trading isn’t new. Also known as exchange betting, the alternative to traditional sports betting has been around for several years, having been popularized by exchange operator Sporttrade, among others.
Exchange trading on sporting events is rooted in implied probabilities, not the standard American odds offered by sportsbooks. Benefits of that methodology include more simplicity and higher payouts to bettors. For example, wagers on Sporttrade are priced at zero to 100, meaning if a team has an implied probability of 50 to win a game, a bettor pays $50 to buy that contract.
Due to the fact that those contracts, and presumably the ones offered by Crypto.com as well, trade like standard derivatives, prices can fluctuate, meaning bettors can add to or hedge their positions as the prices rise and fall.
Where Crypto.com sets itself apart is by allowing clients to purchase contracts in digital currency. The brokerage firm will allow customers to convert the more than 350 cryptocurrencies offered on its platform to bitcoin or US dollars to buy sports event trading contracts. Payouts on winning bets will be made in dollars.
Some sportsbook operators have publicly said they’d like to accept wagers in crypto and potentially payout winning bets that way, should customers want that, but state regulators haven’t signaled willingness to permit that.
Event Trading Market Booming
Buoyed by enthusiasm for political wagering, the event trading market is booming and its intersection with sports is luring more financial services companies, such as Crypto.com.
Due in part to the success of companies such as Kalshi and Sporttade, brokerage firms are eyeing opportunity in the event trading market as more clients and bettors seek a wider menu of wagering options and alternatives to standard fixed odds sports betting.
As for Crypto.com’s Super Bowl contracts, clients can purchase “yes” or “no” contracts on the 19 NFL teams still eligible for the playoffs. The Detroit Lions and Kansas City Chiefs have implied probability of 22% of winning the big game, though a “yes” contract on the Lions costs $22.25 while the same bet on the defending champions is priced at $21.75 at this writing.
