Sports Fan Tokens Rally Ahead of FIFA World Cup, Defying Crypto Market Gloom
Through the doom and gloom of FTX-stricken crypto markets, sports fan tokens are basking in a fresh wave of hype ahead of the FIFA World Cup 2022, which starts Sunday.
The native token of the Chiliz blockchain (CHZ), which powers the largest sports fan token creator platform Socios.com, has surged 11% in the past 24 hours.
Fan tokens for the national soccer teams of Portugal (POR) and Argentina (ARG), both major contenders to win the Cup, “will be the cherries on top during the World Cup,” the research team of crypto exchange Huobi wrote in a report Thursday.
POR has rallied 15% over the past 24 hours and is up 50% during the previous week, while ARG has pocketed a 10% daily and 28% weekly gain, according to FanMarketCap, a fan token price tracker.
The total market capitalization of fan tokens grew 11% in the last 24 hours to $399 million, data by CoinGecko shows.
Fan tokens are cryptocurrencies that represent membership to a community, for example a sports team’s fan base. Token holders can express their support to a team, while they receive specific perks, including game tickets or even some level of participation in a sports club’s decision-making.
The rally precedes the kickoff of soccer’s most important event, the quadrennial World Cup on Sunday in Qatar. The event will conclude Dec. 18 with the crowning of a world champion from a field of 32 national teams, including soccer powerhouses Brazil, Belgium and Germany.
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Sports fan tokens are outperforming the broader crypto market, which is reeling from the bankruptcy protection filing of Sam Bankman-Fried’s crypto empire, including FTX and high-profile trading firm Alameda. FTX has been deeply embedded in the sports world, buying naming rights of stadiums and securing sponsorship deals.
The CoinDesk Market Index (CMI), which tracks the price of a weighted basket of 168 cryptocurrencies, has traded flat in the past 24 hours and is down 2% through the week.
The fan token asset class may lose steam after the World Cup 2022, resulting in lower prices and trading volumes as the hype dies down, according to Huobi’s report.