The 2021 Spanish Super Cup final between FC Barcelona and Atletico Madrid was more than just a game for the title.
FC Barcelona’s “fan token,” the club’s very own cryptocurrency, was also being closely monitored by a large number of Blaugrana supporters. For every time Barcelona scored, the web-based company Socios pledged to “burn” 20,000 tokens, and 40,000 tokens if they won the cup.
Theoretically, winning on the pitch would raise the currency’s worth by increasing its scarcity. In reality, Barcelona lost the game, and despite the fervor surrounding the sport, it didn’t really matter. When there are more than 3.5 million of the tokens in circulation, a few thousand here or there wouldn’t have made much of a difference.
Soccer and cryptocurrency’s budding love affair symbolized something else, the promise of new income sources for an industry that is already overflowing with wealth but constantly craves more. It is worth noting that according to Kieran Maguire, an expert in football finance, the surge in earnings from other sources is beginning to slow down.
Manchester United claims to have 1.1 billion followers throughout the world, regardless of whether or not you believe them. Many clubs have been contemplating whether or not they might find another means of collecting money from that big following. Tokens are the answer.
Football Clubs Launch Their Tokens
Tokens from AC Milan raised $6million in less than an hour in early 2021, or approximately 12% of the club’s record signing Leonardo Bonucci’s worth. The most valued token belongs to Paris Saint-Germain and is worth $45 million.
Football sponsorship may be ready to switch from one dangerous product to another, according to psychology researcher and gambling specialist Dr. Phil Newall in a new report. According to Newall’s analysis, “research has indicated that cryptocurrency traders are prone to have gambling symptoms. The problem is tha there are uncovered psychological parallels between crypto betting football, cryptocurrency trading and generally, online sports betting.” If gambling ads are removed, there would be more room to legitimize things that are just as hazardous, according to him.
Teams are unlikely to be concerned about this as they burn up their resources in their quest for glory. Fan tokens sold for $300 million last year, but Socios will not reveal how much of that went to the clubs with whom it collaborated.
There is still a lot of space for development in the fan token market, considering that only a few dozen teams have made a significant foray into the industry.
According to Pedro Herrera, a senior blockchain analyst at DappRadar – a marketplace for blockchain-related apps, most fans purchase tokens for the associated benefits, such as voting on small decisions about which song to play over the stadium tannoy after a goal or entry into a draw to win a signed shirt.
When unscrupulous dealers prey on fans who believe that a token is more than a glorified collectible, especially on social media, it’s an issue.
Magic beans, I tell you!” No problem if you sell the digital Panini card as a separate product. This is a dangerous place to go when it’s being seen as an investment.
Because of this, “it’s open to manipulation by those with a lot of money invested in it,” as one analyst put it.
However, the crypto story surrounding football’s fan tokens is far from over.
In the year 2021, cryptocurrency sponsors flooded the football industry, and the hungry clubs, leagues, and players embraced them with open arms.
The app may be swapped out. One of the world’s most prestigious leagues, the Serie A, is sponsored by Crypto.com, while Internazionale’s uniform is sponsored by Socios.
Paul Pogba and John Terry, two of the world’s best-known footballers, are also supporting cryptocurrency, trading platforms, and the contentious digital art form known as NFTs. The new business pact between bitcoin and football has already made its reputational concerns all too evident. After an agreement with 3Key Technologies fell apart in a couple of days because no one appeared to know anything about the business or its management, Manchester City was left without a sponsor.
Cryptocurrencies aren’t as well understood as they should be, and many people’s judgments are based on faith, believing that if a company says it has the money, it has it.
Watford has a front-of-shirt sponsorship contract with Stake.com, the country’s largest bitcoin deal.. A large number of the league’s hundreds of millions of worldwide spectators could find it appealing, despite the fact that crypto gambling isn’t permitted in the United Kingdom.
Watford players’ shirts now display the Dogecoin emblem, a “joke” currency whose value fluctuates significantly in reaction to tweets from Tesla billionaire Elon Musk. This is all part of the deal.
A source at Watford said in August that the Dogecoin sleeve display added $948,014 to the agreement, based on the average value of these kinds of sponsorship deals.
He believes that these kinds of sums will become more impossible for teams to ignore, especially if the government proceeds with a root-and-and-branch reform of gambling laws, which might result in football losing its cash cow of shirt agreements with betting companies.