Fan tokens surge ahead of Euro 2024 and Copa América
A giant football replica outside Munich Arena before Euro 2024.
Activity in Football-Linked tokens grow
As football mania spreads across Europe and the Americas, a small but buzzy segment of the cryptoverse takes centre stage: fan tokens. These are not your typical digital assets; they are tokens issued by national teams or individual clubs that promise fans a tradeable means to interact with their teams.
Rising market value of Chiliz cryptocurrency
Token activity concerning participating national teams has surged ahead of the Euro 2024 European football championship, which begins on Friday, and the Copa América in North and South America, which starts a week later. The market value of the Chiliz cryptocurrency, the native coin of the Socios blockchain that hosts the most important fan tokens, has risen to nearly $1.07 billion from $687 million at the beginning of the year. This rise is approaching levels last seen before the 2022 World Cup, according to CoinGecko.
Increasing trading volumes
Trading volumes for fan tokens have also increased in recent months, reaching more than $170 million on May 24, up from $25 million to $57 million for the whole of January, according to Kaiko data. The total market value of listed fan tokens is approximately $413 million, according to CoinGecko data. This summer of sports could be a litmus test for the still-developing industry of fan tokens, which often provide benefits such as lottery entries, early ticket access, product discounts, or the ability to vote on small choices such as match tunes.
Supporters and critics weigh in
Supporters hail the tokens as a rare example of real-world crypto utility, while detractors point out contradictions between the stated goal of team participation and the speculative—and risky—nature of tradable assets. A Chiliz spokeswoman stated that the company's marketing made it clear that "fan tokens are fan-engagement tools and should be used as such."
Future of fan tokens
The price of Portugal's fan token has risen by around 2% in the last 30 days to $2.94, while Argentina's token temporarily reached its highest level since 2022 at $2.46—though both are still trading below their peaks set around the 2022 World Cup. "There has been a significant increase in trading volumes, but we expect it to be short-lived," said Jag Kooner, head of derivatives at Bitfinex, predicting a dip in trade after the World Cup.
The fan token market is headed for an interesting test this summer, as major football tournaments could either boost or promote the sector's speculative nature.
(With inputs from Agencies)