Crypto’s Football Fan Tokens are proving a separate target for many

I’m not usually interested in studies on trends in stocks and crypto, but a new one from TradingBrowser.com, a crypto exchange review site, caught my eye. It looks at Soccer Fan Tokens, NFTs (non-fungible tokens) that allow team fans to show their support and hopefully reap some benefits now and in the future.

This is crypto, what could go wrong?

Typically, a token starts with a price in the low dollar, pretty much along the lines of scratch cards. It also means that for $100, a fan can have a bunch of tokens, and as we know, beginners love to have a bunch of an instrument because a small price move feels like the chance of a big win. Us veterans may chuckle, but we all know deep down that our inner gambler just knows this is right. This is just one of many flawed pieces of logic built into humans, so it’s no surprise that it’s being exploited for soccer fan tokens.

As a crypto fan I love the idea of ​​fan tokens, but as a non-footy fan the enthusiasm stops there. No doubt hundreds of millions, maybe billions of people are crazy about football, so the idea of ​​having a ticket that allows you to get benefits and even use those tickets for a voting process to use in polls for things like choosing the team motto for that season seems like a product worth selling.

Arsenal, the famous British London-based club, has a fan token worth $15 million in market capitalization, which looks useful when a year’s total commercial activity pulls in $120 million in total sales.

Nevertheless, the story is not happy for everyone who buys these tokens as an investment. These certainly cannot be classified as securities, but I’m sure they will be and probably already are somewhere in the bowels of US regulation. If you buy a baseball card, you’d never dream of being disturbed by the financial umpire, but this is crypto, so if you buy fan tokens of the same value as, say, an official football shirt, you might be an investor who deserves the protection of the securities laws’ long arm.

The evidence of poor football fans being bilked out of their hard earned money is there for all to see…wait, these are fan tokens, not Enron stock. Fans buy these tokens to own them the same way they buy scarves; they don’t feel cheated when they get shrunk in the wash, it’s not about the money, although being a football supporter is hardly a cheap habit these days. It’s about being part of something.

Now there is a secret rule in investing and it is an “investment” that pays you in the coin of your choice. A glory stock is likely to lose money because it is fun and exciting to own. If you want to make money, you have to buy stocks that have to bribe you heavily to hold them. If you want to gamble on volatile stocks, your financial return will be low to negative because you got your return in adrenaline, and as anyone who goes to the movies or Disneyland will attest, fun and excitement don’t come cheap.

Therefore, fan tokens should lose the buyer – I don’t want to say investor – money because they should get dividends in the form of joy of ownership. Of 23 teams in the research, only 3 are up over 2022-2023: Santos 23%, Napoli 21% and Monaco (Billionaires United) up just 1%.

If you had magically picked the top five fan tokens – Santos, Napoli, Monaco, Lazio and Arsenal – and bought an equal amount, you’d find yourself 5.8% off your backer, and if you were smart enough to to choose the five worst priests. you would have lost 80% of your money. It’s hard to pick a fan token that wouldn’t have lost more than half of your money with 16 of the 23 teams’ fan tokens dropping by more than half.

There is £850,000 worth of Leeds United fan tokens in circulation at the bottom of the league and $26 million for Santos at the top of the league, so while regulators try to put crypto back in the box, it will be a long time before they turn their attention to a global market which is minimal.

So the crypto speculator has a call to make. Are sports fan tokens a big wave of the future or just a passing novelty? If it’s the latter, brave believers should obviously soak them up. Fan Tokens are like other ephemeral media like gum cards and comic books and therefore may never be worth much in the future…oh wait.

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