The club or brand-specific fan tokens are slowly losing their popularity and value in the market. Investors believe these tokens hold short-term popularity and trading opportunities. Is it a promotional slack-off or a loss of interest?
What is a Fan Token?
A fan token is a digital asset service on blockchain technology released by sports or any organization for the fans. Only a limited number of people can be members and hold the fan token.
It is a unique way of increasing fan engagement and creating an inclusive community. Many sports clubs like Manchester City, Lazio, Porto, Santos, Barcelona, AC Milan, and Trabzonspor have released their own fan tokens.
Fan Token Value
Fan token value is defined by how much they are worth for fans of a club. According to various sources, fan tokens have recorded about $3.5 billion in sales.
Recently, these tokens have lost their worth even though the sales report is from March. They have lost worth as a utility among fans, and most don’t even care about it, including the clubs that release them.
Binance’s Staking Policy
Binance recently allowed Lazio fan token holders to stake through the crypto market and earn profit to increase their worth again. Despite the cryptocurrency’s attempt, the fans remain disinterested.
Experts believe the fault entirely falls on the clubs that refuse to promote fan tokens properly after the release. Before the launch, clubs advertise it well but later they forget about updating the fans with the newest launches, leaving it as an abandoned project.
So, the fans eventually lose their interest as well.
CEO of the XCAD Network, Oliver Bell says, “The problem with fan tokens is the clubs do not actively promote them or the utility the tokens have. The people that are buying them are not necessarily fans of the clubs at all; the only buyers are crypto enthusiasts.”
Are Fan Tokens a trade opportunity?
Based on Oliver’s statement, many investors believe that fan tokens can be a good short-term trade opportunity.
For example, When Lionel Messi switched his club to PSG, the PSG tokens rose in worth drastically. Some investors got the token and quickly sold it for profit. But later, the worth of the PSG tokens dropped, signaling a loss of interest among fans.
In contrast to that, many people believe that fan tokens shouldn’t be considered an investment because they are solely made for fans.
“We think it matters for fans to be recognized by the club, [wherever] they are in the world as someone who belongs to a community,” says Socios founder Alexandre Dreyfus.
Socios is the platform where all the fan tokens are held. According to Dreyfus, the fan tokens have increased since last year, compared to the common belief that fan tokens are losing value as a utility.
The growing fan token market based on their data disagrees with this.