Why have football fans spent $ 300 million on controversial crypto fan tokens?

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A recent report revealed that sports fans are pumping millions of dollars into so-called cryptocurrency ‘fan tokens’, earning clubs massive payouts in the process.

Fans of football clubs in Europe’s top five leagues have invested around $ 350 million in the controversial tokens, with the promise of being able to use their holdings to influence the clubs’ actual decisions.

In reality, the ownership of crypto fan tokens has an insignificant level of influence, while many club-related cryptocurrency projects have fallen in value since their launch.

So why are soccer fans spending millions on cryptocurrency fan tokens?

Well the answer is kinda in the question. Hardcore football fans have jumped at the chance to gain access to their favorite club, with many cryptocurrencies issued by the club claiming to offer a real chance to influence decision-making.

Any opportunity to increase their support and interact with the club is seized for some fans, regardless of the medium.

Now, a BBC report has revealed that the total spent on crypto fan tokens for football clubs is in the hundreds of millions of dollars, with some tokens increasing in value more than Bitcoin until 2021.

The main reason behind the tokens is therefore better access to the club, or other perks such as a permanent discount in the club shop, voting rights on club songs played after a goal is scored, l sticker on the club bus, opportunities to win tickets and rare souvenirs, and more.

MAKEUSEOF VIDEO OF THE DAY Where do fans buy the club’s crypto tokens?

The largest crypto fan token platform currently is Socios, which hosts tokens for many of Europe’s biggest soccer teams, including Barcelona, ​​Paris Saint-Germain, Juventus, AC Milan and Manchester. City. Even the Italian national team are on the verge of releasing one of the tokens, although the final details of owning that token are yet to be finalized.

Football fans can convert their money into the Chiliz cryptocurrency and purchase tokens for their club on the platform itself.

However, each club’s cryptocurrency tokens are subject to wild fluctuations, and even among the wild world of crypto-trading, they are considered a very volatile investment.

For example, many Fan Tokens found on Socios have dropped significantly since launch. Crypto fan tokens for Manchester City (UK) and Lazio (Italy) have fallen by 50% and 70%, respectively, although both are due to relatively high introductory prices.

Other tokens have delivered better performance, with Inter Milan (Italy) and Trabzonspor (Turkey) tokens offering better gains than Bitcoin since their launch.

Why Are Crypto Fan Tokens Controversial?

The problem with crypto fan tokens issued by clubs is that they appear to be selling something that doesn’t exist. No, we’re not talking about digital currency in general, but the level of access that tokens grant to the club.

When you compare the volatile nature of crypto to the ability to choose a song or enter a raffle to win tickets, the whole danger lies with the supporters.

Related: Biggest Risks For Crypto Investors (Newbies & Veterans) Also, as with all cryptocurrencies, there is very little protection for fans who invest in those club-issued tokens, and not from from the platform they are hosted on or the club they are re purchased from.

Another problem is that the issuing club often owns most of its tokens, which does not give a true representation of the price of the token or the reality of the market. For example, the BBC report found that the top 13 clubs on the Socios platform hold a total of $ 1.9 billion in chips, while fans only own $ 367 million. This imbalance is a source of concern for anyone looking to invest in fan chips, as power remains heavily skewed towards the issuing club.

Fan Tokens are not exclusive to football and can be found in Formula 1, American football, UFC, and even games. However, the pitfalls extend to every sport, and it would be wise to do as much research as possible before getting involved in such projects.

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About the author Gavin Phillips (998 published articles)

Gavin is the junior editor of Technology Explained, a regular contributor to the Really Useful podcast, and a frequent product reviewer. He has a degree in contemporary writing plundered in the Devon Hills and over a decade of professional writing experience. He is very fond of tea, board games and football.

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