For many hopeful fans, football club tokens have turned out to be a disappointment, with prices rapidly losing steam in a matter of days. Three years have passed since the tokens began to be listed on the main cryptocurrency exchanges, promising an alternative for clubs to obtain financing and for fans to be closer to their favorite teams.
Both options continue to fall short of expectations. Clubs that have issued tokens include Manchester City, SS Lazio, FC Porto, Santos FC, FC Barcelona, AC Milan and Trabzonspor. Some, like FC Arsenal, have raised up to $5.5 million through these types of tokens, although most transactions are closer to $2 million. That represents just a fraction of the expenses of these clubs.
Clubs can potentially generate additional revenue from future token sales. According to Socios, these first day offerings usually make between 5% and 10% of the total supply of tokens available.
Clubs can also generate revenue from the fees they charge for volumes traded on Binance or other exchanges they list on. Binance is currently the most active crypto exchange for these tokens, according to data from Coingecko.
Analysts warn that the demand for tokens quickly goes from euphoria to indifference. The main criticism they make is that these have few tangible benefits for fans. With the Juventus token, for example, fans can purchase VIP tickets with loyalty points they accumulate by being token holders, while the PSG token was used to allow holders to vote on the team’s new bus design and slogan. of the club.
The problem with today’s tokens is that clubs aren’t actively promoting them and their utility, explained Oliver Bell, CEO and co-founder of the XCAD Network, a company that issues tokens for content creators. He went on to argue that the people who buy them are not necessarily fans of the clubs; clarifying that the only buyers are cryptocurrency enthusiasts.
Meanwhile, the market remains tight. The market capitalization of these sports tokens amounts to 491 million dollars and their daily volume traded is 241 million dollars. The top 10 fan tokens have an average daily volume of $13 million, accounting for 28% of the average daily traded volume of the 364 digital coins listed on Binance, according to data from CoinMarketCap and Coingecko.
The world’s largest fan token by market cap, Manchester City’s, has a market cap of $56 million and daily traded volume is under $15 million, according to CoinMarketCap.com. Its price has lost 50% of the value since it was first issued.