By Stefanos Gregoriou, The Sports Financial Literacy Academy
Cryptocurrency is no longer just a buzzword in the world of tech and finance. It’s become a trending topic in sports as well. From high-profile sports professionals being paid their salaries in Bitcoin to college athletes exploring NFTs as part of their NIL strategies, the digital currency space is opening new doors. But with those doors come risks.
Cryptocurrency has potential; but only if you understand the landscape, weigh the risks, and make informed decisions.
What Is Cryptocurrency and Why Does It Matter?
Cryptocurrency is a type of digital money that lives on the internet. It’s not issued or controlled by any government or bank. Instead, it operates through a technology called blockchain, which acts like a secure, public ledger that records every transaction made with the currency.
The most popular cryptocurrencies are Bitcoin and Ethereum, but there are thousands of others. These coins can be bought, sold, and traded through apps like Cash App. Crypto matters because it represents a shift in how people think about money, ownership, and even identity in a world that’s increasingly digital. Crypto and blockchain-based tools like NFTs allow you to turn your brand into income.
Why Are Athletes Getting Involved in Crypto?
Athletes are drawn to crypto for several reasons:
- Financial Opportunity. If you invested early in Bitcoin or Ethereum, you could have seen massive returns. That kind of growth is hard to ignore, especially when you’re looking to make your money work for you.
- More Control. Traditional sponsorship deals usually go through agents, agencies, and brands. With crypto-based tools like NFTs, you can sell digital products directly to your fans without a middleman. It’s a way to take ownership of your content and create passive income streams.
- Innovation & Future Trends. In a competitive NIL marketplace, showing that you’re forward-thinking can make you more appealing to brands that want to associate with the next generation of leaders.
The Rewards:
If done right, crypto can offer real benefits.
- High Returns. Even small investments in the right coins can grow significantly over time, giving you more financial freedom.
- Global, fast transactions. You don’t need to wait for bank approvals or deal with international transfer fees. This is especially helpful if you’re doing business with overseas companies or brands.
- Digital Assets. NFTs create a new way for athletes to earn money by selling digital assets like highlights, behind-the-scenes videos, or limited-edition memorabilia. These can be resold by fans, and athletes can earn royalties on each sale. Thus, giving you more control over your brand and revenue.
The Risks:
Despite the exciting upside, there are serious risks that every athlete should consider before diving in.
- Crypto prices can rise and fall dramatically in a matter of hours. If you’re being paid in crypto or holding a large portion of your NIL earnings in it, that money value is not stable.
- Scams. Fake NFT projects, phishing links, and “too good to be true” investments pop up all the time. Athletes are especially at risk because of their public profiles. If someone offers you a deal promising guaranteed returns or huge exposure, be sceptical.
- If your crypto wallet gets hacked or you lose your login credentials, you could lose all your funds. And unlike a stolen credit card, there’s no way to recover crypto once it’s gone.
- Legal and Tax Complications. In the U.S., the IRS treats crypto like property, not cash. That means every time you buy, sell, or trade, you’re potentially triggering a taxable event. If you don’t report it correctly, you could be hit with penalties or audits in the future. That’s a major burden if you’re not keeping detailed records.
How to Approach Crypto as an Athlete:
Should you get involved with crypto? Yes, but only if you do it carefully! Start by learning as much as you can. Don’t jump into any deal you don’t fully understand. And never invest more than you’re prepared to lose.
If you’re offered a crypto-based NIL deal or an NFT partnership, run it by a financial advisor or NIL rep who understands this space. Make sure you’re clear on how you’re being paid, what rights you’re giving up, and how your brand is being used.
Cryptocurrency isn’t a shortcut to riches, but it can be a tool to help you grow your wealth and brand if used wisely. The key is preparation, strategy, and a strong support system.
You’ve already got the discipline it takes to train and compete at a high level. Apply that same mindset to your financial future!
The Money Smart Athlete® Blog is established and run by the Sports Financial Literacy Academy® (SFLA). Through its education programs, the SFLA has the vision to financially educate and empower athletes of all ages to become better people, not just better athletes. For more information on our courses, our SFLA Approved Trainer Program®, and how they can benefit you and your clients, please get in touch with us at [email protected].