Dutch football club PSV secured a ticket to the round of 16 of the Champions League yesterday thanks to a historic comeback against Sevilla in Spain. Eindhoven’s sporting successes are to some extent influenced by their financial resources, with Bitcoin (BTC) playing an interesting role.
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BTC on PSV’s balance sheet
PSV merged with Dutch crypto exchange Anycoin Direct in August 2021. For a period of two years, Veghel exchange became the official cryptocurrency partner of PSV to give the platform and cryptocurrency a bigger stage. As a unique part of the collaboration, the Eindhoven football club received the entire first year of sponsorship in Bitcoin. The total amount was 400,000 euros. It was a first within European borders
A few months ago, PSV published its annual report for the 2022-2023 season with a net profit of 13 million euros. It was also stated that the Bitcoin holdings on June 30 of this year were the equivalent of 232,000 euros.
Compared to the previous year’s value of 169,000 euros, this represented an impressive increase of 63,000 euros or 37 percent. This increase in value has increased PSV’s financial flexibility, which can benefit the overall quality of the selection.
The Bitcoin price is now around 25 percent higher than in June, which has further strengthened the club’s financial position. Should Bitcoin enter a new bull market, PSV could be able to raise more money than the initial €400,000. This would make the sponsorship deal significantly more lucrative and provide an additional bonus that can be used to invest in players, facilities or other strategic projects.
However, it is important to note that Bitcoin price fluctuations are not directly reflected in PSV’s financial results. Only when the decision is made to sell (part of) can the profit or loss be recognized.
Associated Crypto Volatility Risks
Despite the huge increase in value that Bitcoin has experienced over the past year, it is important to remember that PSV began its Bitcoin journey in the middle of the previous bull market. PSV received 400,000 euros in Bitcoins at the time and is still at a loss in this regard.
It reflects the risks posed by Bitcoin’s volatility. However, there is nothing wrong with PSV leaving the Bitcoins untouched in the Anycoin Direct wallet. Only if the club decides to sell will this have an impact on its financial results.
Of course, receiving sponsorship funds in fiat currency brings with it a certain level of security. Still, Bitcoin, or perhaps another cryptocurrency, can increase financial stability if its value increases. A careful balance between embracing innovation and managing associated risks is critical. PSV, for example, did this by choosing fiat currency as its preferred payment method in its second year.
The most recent annual report emphasized that PSV’s Bitcoins are not held for the long term. Therefore, it is important for PSV to exit the market at the right time. By hibernating on the million dollar ball, PSV will earn around 30 million additional. In this regard, the club has additional breathing room to cover the possible risk of its Bitcoin position.
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