Cryptoverse: Messi takes on Ronaldo in the ‘world’ of fan tokens

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The market for football fan tokens, a volatile cocktail of cryptocurrencies and sport, is heating up in the Qatari desert.

Interest in this niche of cryptocurrencies, normally linked to sports teams such as Barcelona or Brazil, has skyrocketed with the soccer World Cup that began on November 20.

The average daily trading volume of these tokens has risen to about $300 million in November, up from $32 million the previous month, according to Kaiko, a Paris-based cryptocurrency data firm.

“So we have a 10-fold increase in volume that is huge for these tokens,” said analyst at analysis Dessislava Aubert.

For some buyers, these tokens offer the possibility to engage with their team and gain advantages such as the possibility of winning prizes and voting for the songs that are played in the matches. For others, tradable currencies represent a new investment opportunity.

Still, it takes boldness to try to detect any sensible relationship between erratic currency prices and real-world events.

Lionel Messi’s Argentina slumped 25 percent to $5.26 after the team’s surprise loss to Saudi Arabia in their first World Cup match. However, it is down a further 22% since the team’s subsequent win over Mexico came as a relief to fans.

The currency of the Portuguese national team, in which Cristiano Ronaldo plays, rose 119% to $7 in the 10 days leading up to the tournament but then lost almost half of its value, even though the team remained unbeaten and was first in the group in its clash with Uruguay on Monday. in which he won to reach the knockout stage.

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Similarly, in club football, Arsenal’s record has fallen 12.5% since the start of the season, to $1.68, despite its brilliant record to the top of the English Premier League.

The general malaise of the cryptocurrency market is partly responsible for falling prices, according to analysts, who claim that volatile assets are losing steam as investors avoid risk.

The market capitalization of fans’ coins rose to $401 million on the opening weekend of the World Cup, up from $256 million about 10 days earlier, according to data from CoinGecko, but has since fallen back below $300 million.

Siddharth Jaiswal, founder and CEO of Sportzchain, which mainly issues tokens for the Asian market, said people shouldn’t buy the coins primarily to make money.

“The icing on the cake is that this is a tool, available on the blockchain that can be easily traded in the future, so it has a financial connotation,” he added.

“But the first perception should never be that the token is being bought for amateurs from a profit generation standpoint.”

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