Are fan tokens worth the investment?
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Cryptocurrencies have been a hot topic for the past few years. It has attracted the interest of industries beyond the finance sector, and now, everyone wants a piece of the crypto pie. In the world of sports, the crypto craze has spawned a new kind of cryptocurrency: the fan token.
Hype for the fan token is so intense that they’ve generated about £260 million since the concept’s initial launch, as revealed by a report from the BBC. Many of the world’s most prestigious football clubs in Europe have launched their own fan tokens, giving their fans fun new ways to engage with their favourite teams. But what exactly are these new digital assets? What benefits do they offer, and are they smart investments? Here, we’ll go over the things you need to know about fan tokens.
What are fan tokens?
Fan tokens have many of the same features cryptocurrencies have. Like cryptocurrencies, fan tokens are currencies that can be used to purchase specific commodities. They exist exclusively as digital assets and record all transactions on a public blockchain database. However, unlike cryptocurrencies, fan tokens can only be used to access the specific benefits offered by the organisations they are meant to support.
When a person buys fan tokens, they gain access to an exclusive ledger of fan-related benefits. They can then use their fan tokens to purchase these benefits. Some of these benefits include limited edition merch, access to games or exclusive fan events, or voting rights for team decisions like kit designs, bus designs, and even the team’s official motto.
How can I buy fan tokens?
Fan tokens can only be purchased using Chiliz (CHZ), which is a cryptocurrency that was created to support blockchain tools used by sports and entertainment entities. You can buy CHZ at any major cryptocurrency exchange, including Binance, Coinbase Pro, and Crypto.com.
Once you purchase CHZ, you need to make an account on Chiliz’ fan token platform, Socios.com. Load your Socios account with CHZ to purchase your fan tokens of choice. You will then be able to use the Socios website and app to access fan rewards.
What are the most popular fan tokens?
Based on market capitalisation, today’s most popular fan tokens come from top football teams Paris Saint Germain, Manchester City, Atletico Madrid, FC Barcelona, and Juventus. These teams’ market caps all surpass £15 million. Paris Saint Germain remains far ahead at the top spot, with a current market cap of about £34 million.
The value of Paris Saint Germain’s fan token greatly benefited from Lionel Messi’s transfer to the club in 2021. To give the cryptocurrency more publicity, Paris Saint Germain included an estimated £1 million worth of PSG fan tokens in Lionel Messi’s salary package. Following the news, the PSG fan token’s value shot up by over 50%.
Are fan tokens worth the investment?
Like any cryptocurrency, fan tokens can be bought and sold for profit. However, the main value of fan tokens stems from the exclusive privileges they can purchase. Prices may rise and fall depending on how much importance sports fans place on these exclusive privileges.
Fan tokens can be good investments for fans that want the chance to meaningfully engage with their favourite sports teams. While a secondary market does exist, fan tokens were not created for the purpose of generating profit for its holders. Thus, if you decide to invest in fan tokens solely for the possibility of financial gain, you need to understand that there are risks involved. Study the market thoroughly, and only invest what you can afford to lose.
Innovations in blockchain technology have provided new ways for industries to improve their relationships with consumers. Through fan tokens, fans can find meaningful new ways to interact with sports teams and organisations.
Like any cryptocurrency, fan tokens can be bought and sold for profit. However, the main value of fan tokens stems from the exclusive privileges they can purchase. Prices may rise and fall depending on how much importance sports fans place on these exclusive privileges.
Fan tokens can be good investments for fans that want the chance to meaningfully engage with their favourite sports teams. While a secondary market does exist, fan tokens were not created for the purpose of generating profit for its holders. Thus, if you decide to invest in fan tokens solely for the possibility of financial gain, you need to understand that there are risks involved. Study the market thoroughly, and only invest what you can afford to lose.
Innovations in blockchain technology have provided new ways for industries to improve their relationships with consumers. Through fan tokens, fans can find meaningful new ways to interact with sports teams and organisations.
