Last spring’s crypto crash is sparking a lot of conversations around the asset class. As the bulls rush to defend the industry and the bears escalate in their criticism, the digital money market is becoming one of the most heated debates in the country. As the debate continues, critics are also turning to an NFL athlete to make their point. They believe that the Trevor Lawrence crypto contract proves that crypto is not yet ready to exist as a means of payment.
Trevor Lawrence is one of the last high profile players in the NFL. After playing college football at Clemson University and leading them to a national title, Lawrence had amassed a large draft stockpile. When Lawrence finally declared for the league draft, many expected the quarterback to score the first overall pick.
As the NFL Draft approached last year and crypto projects began to make their way into the US market, Lawrence also became a high-value sponsorship opportunity. Even before receiving the first overall pick, the player signed several deals. Perhaps the most talked about — and certainly the most controversial — was his sponsorship deal with Block Wallet.
Lawrence isn’t the first athlete to earn his salary in crypto, but he’s certainly the most high-profile. After winning the deal and being drafted with the first pick, the player received a signing bonus of around $24 million. Blockfolio, as part of the deal, converted the bonus into cryptocurrency and put it in Lawrence’s wallet. Looking back on today’s deal, however, critics have all the evidence they need to eliminate crypto as a transactional currency.
Trevor Lawrence Crypto Contract Is Aging Badly, Posting Massive Losses
News of Trevor Lawrence’s crypto contract is now over a year old. However, critics are backtracking on the story to use the numbers as evidence of a serious problem crypto bulls face trying to accelerate crypto adoption.
Specifically, The file — a subsidiary of Sports Illustrated — now look at Lawrence’s deal to see how it ages. And it turns out it’s going pretty badly. The athlete’s sizable signing bonus has lost a lot of value due to the volatility in the crypto market. In total, the investment lost more than 62% of its value.
Assets in the portfolio now total just under $9 million. For reference, the 14th overall pick in the same NFL Draft earned a $9 million signing bonus. Those losses are equivalent to Lawrence dropping 13 picks lower in his draft class.
The retrospectives on the sponsorship deal lead back to a main course; there is not enough stability in the crypto market to justify assets as payment.
Regardless of his losses, Lawrence is still earning millions and millions of dollars. But it’s also safe to say that Lawrence is far better off financially than the average retail investor. It is therefore much more problematic to see different products appearing that combine crypto with important investment choices, all aimed at everyday investors.
Take Bitcoin (BTC-USD) 401ks, for example. These products are intended to entice average Americans to put highly volatile assets into retirement funds. As Lawrence’s short stories suggest, it’s a terrible idea. What the industry needs to do to make these products safer for ordinary investors remains to be determined. But there is an obvious problem that needs to be solved; companies are getting ahead of themselves by deploying these products too quickly.
As of the date of publication, Brenden Rearick has not held (directly or indirectly) any position in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to InvestorPlace.com publishing guidelines.