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Is it worth investing in fan tokens? - immapsummit
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Sports clubs and professional teams issue their own tokens that give their fans access to unique content. These digital assets give owners the opportunity to participate in the life of their favorite teams, receive bonuses and early access to tickets to sporting events.

A large number of such tokens are presented in the Socios application on the Chiliz blockchain. Tokens of Paris Saint-Germain (PSG), Barcelona (BAR), Juventus (JUV), Milan (ACM), Formula 1 teams Aston Martin (AM), Alfa Romeo (SAUBER) and many others are available on the platform other sports organizations.

Another platform launching fan tokens is Binance Launchpad. Coins of such football clubs as Santos, LAZIO and Porto were issued on it, as well as the ALPINE token from the Alpin Formula 1 team.

The market capitalization of fan tokens is $321 million as of August 25, and the daily trading volume of the top ten coins from this category is more than $162 million, according to Coingecko. Cryptocurrencies of sports clubs are traded on many leading exchanges, including MECHS Global, Binance, Bybit and CoinEx.

Experts told RBC-Crypto about what affects the value of such assets, and whether they can be considered as investments.

“Image resource”

Sports teams started issuing the first tokens a couple of years ago, and now this trend has become almost ubiquitous: coins are issued by the most famous sports clubs with a worldwide reputation, says Artem Deev, head of the analytical department of AMarkets.

According to the expert, fan tokens are more an image resource than a real way of earning money. He explained that this is not so much an investment item as one of the ways a sports organization interacts with its fans.

The senior analyst agreed with him Nikita Zuborev. He said that fan tokens are often bought to have certain privileges — to participate in voting for the best player or in team paraphernalia sweepstakes, to have access to exclusive events and so on.

“Symbol of belonging”

The value of such assets is in direct correlation with the general trends in the cryptocurrency market, according to the head of the analytical department of AMarkets. Deev explained that now, in the conditions of falling leading coins, such tokens are also declining in price, and a reversal may not happen soon. According to the analyst, the world is now expecting a recession, investments in risky assets are likely to decline even more, which will lead to a decrease in the value of fan tokens.

But there are factors that can increase the price of coins of specific teams, for example, the victory of a sports club in major competitions, the expert noted.

“The value of such a token will grow along with prestige, have a certain symbol of belonging to the winning team. In this regard, fan tokens are akin to rare editions of stamps or collectibles,” Deev believes.

“Investment component”

Such tokens are speculative, they have almost no fundamental value, according to Zuborev. Considering tokens as investments, you should pay attention to those that may be popular in the future, the expert says.

According to him, if one or another team is planning an important game, event or purchase of a player, then the consequence of such an event may be an increase in demand, and therefore an increase in the price of the token. Other mechanisms for increasing the value are not used today, so it is just as risky to consider such an asset class as an investment as buying an NFT, Zuborev believes. But the expert clarified that fan tokens often have more liquidity than any non-interchangeable digital assets.

The most useful advice to investors is not to participate in the FTO (Fan token offering), Zuborev believes. He explained that due to the high hype in a short time period, the cost of the initial issue is often overstated and very quickly, usually within a few weeks, less often months, in conditions of relatively little liquidity, the price decreases several times. In such conditions, fans of sports competitions can already buy tokens of their favorite teams in the hope of an investment benefit, then there will be more chances for luck, the expert is sure.

“A rarity among fans”

In the case of fan tokens, everything is very individual, says Artem Deev. He clarified that if the coin is timed to a landmark event or the issue of a token is limited, then this immediately raises its price in the eyes of the owners and you can earn money on it.

“Such tokens are becoming rare among fans and they can be sold or exchanged for something with a profit. This is not really an investment, but rather a collection, which is appreciated by sports fans,” the expert concluded.