Football fever is driving up activity in fan tokens as major tournaments in Europe and the Americas approach.
What Happened: Fan tokens are gaining traction as the Euro 2024 and Copa América tournaments near, Reuters reported on Tuesday. These digital assets, issued by national teams or clubs, offer fans a tradeable way to engage with their favorite teams.
Activity in tokens linked to participating national teams has surged ahead of the Euro 2024, which kicks off on Friday, and the Copa América, starting a week later. The market value of the Chiliz cryptocurrency, the native coin of the Socios blockchain hosting most major fan tokens, has risen to over $1.07 billion from about $687 million at the start of the year, nearing levels last seen around the 2022 World Cup, according to CoinGecko data.
Trading volumes of fan tokens have also increased, registering more than $170 million on May 24, compared to between $25 million and $57 million for most of January, according to Kaiko data. The total market value of listed fan tokens is around $413 million, CoinGecko data shows.
This summer could be a crucial test for the fan token sector, which offers perks like raffle entries, early ticket access, and merchandise discounts. While backers praise the tokens as a real-world crypto utility, critics point out the speculative and risky nature of these tradeable assets.
Why It Matters: The surge in fan token activity is reminiscent of the volatile trading witnessed during the FIFA World Cup 2022. During that period, average daily trading volumes skyrocketed from $32 million to approximately $300 million, an increase of 837%, according to Kaiko data. This highlights the significant impact major sporting events can have on the cryptocurrency market.
Moreover, the integration of blockchain technology in sports is not new. Clubs like Paris Saint-Germain F.C. have been at the forefront, recently partnering with Crypto.com for AI-generated NFT match posters. This follows their earlier licensing deal with the NFT fantasy sports game Sorare.
Additionally, major clubs like Barcelona, Manchester City, and Juventus have embraced tokenization, indicating a broader trend of NFT integration in the sports industry. This trend suggests that the digitalization of sports assets is likely to continue, providing fans with new ways to engage and invest.
Image by alphaspirit.it via Shutterstock
This story was generated using Benzinga Neuro and edited by Pooja Rajkumari
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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