Fan Tokens: Are They a Good Investment Opportunity?

In the sports industry, a new kind of cryptocurrency has been born in the form of fan tokens. At the moment, it seems that fan tokens are everywhere and have created such hype that it’s become a booming business.

In Europe, numerous prominent football clubs have spawned their own fan tokens with hopes to cash in on this potentially lucrative industry. The BBC points to a report that estimates that fan tokens have generated more than £26 million (30.6 million euro) since they were launched. So, what are fan tokens? Can owners make money on them like how investors make money with BlockFi? Are fan tokens a good investment opportunity?

Fan tokens are blockchain-based digital assets that give owners special access and privileges to their favourite clubs like the chance to experience a meet and greet with the players or the ability to vote on minor club-related decisions, among others. The fan tokens themselves are not the crypto. The cryptocurrency is Chiliz ($CHZ), like Bitcoin or Dogecoin, and they can be purchased on the Socios app.

People that desire ownership of any club fan token must first install the Socios app, then purchase Chiliz Tokens, and exchange the Chiliz Tokens for the specific club fan token they want to own. As an owner of a fan token, the fan can participate in polls that cover various club topics like:

  3. Which kit should the team wear?
  6. What should be the warm-up entrance song?
  9. What should be the design of the player’s tunnel?

Another benefit of holding the digital asset is being able to earn reward points from participating in polls and win official club merch, such as a football kit signed by the players. The goal of these digital assets is to bring a new level of engagement between fans and their favourite teams through ownership of the fan tokens, thus giving more authority to the fans.

Are fan tokens classified as investments?

The value of fan tokens rise and fall and can be affected by teams doing well on the pitch. For instance, if you own a Manchester City fan token, and they win the Champions League, then the value of your fan token could go up. For example, AC Milan’s fan token last season increased by 3.75% following their Serie A title win. While the price of each fan token is volatile, it can be concluded that fan sentiment plays a large role in the fluctuation of its market price. If a person follows the games closely, they might be able to find a few good picks.

Does this make them an investment?

The answer is, not really, as Socios CEO Alexandre Dreyfus points out, fan tokens are not an investment because they are to be used to deliver value to fans as well as revenue to sports teams. Socios has already partnered with more than 100 sports teams with the goal to give fans value thorough recognition, benefits and voting rights.

While Dreyfus doesn’t consider fan tokens as investments, the fan tokens do provide real tangible value, as well as experiences, to their fans, therefore the intrinsic value of Chiliz could increase. A fan may look at fan tokens as investments, nonetheless, but a real investor would focus on the market price and fluctuations of Chiliz, as it is an authentic cryptocurrency and is used to buy and trade fan tokens. Chiliz is definitely an investment opportunity as many have already put their money into.

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