Soccer clubs have potentially made hundreds of millions of pounds selling controversial crypto “fan tokens.”
Analysis commissioned by BBC News estimates that more than £ 262 million ($ 350 million) has been spent on virtual currencies.
Some of the tokens are traded to offer real world benefits to the buyer.
But critics say these benefits are negligible – one offered a chance to vote for songs to be played in stadiums – and clubs don’t have enough protection for fans.
Club specific cryptocurrency
So far, in the top five European leagues, 24 different clubs have released or are considering fan tokens, including eight Premier League teams.
Most offer tokens similar to a club-specific cryptocurrency – virtual currencies can be bought and sold, and their value increases and decreases based on supply and demand.
Some clubs, like Manchester City, also sell digital collectibles known as NFTs (non-fungible tokens).
Most of the clubs that offer fan tokens have subscribed to a company called Socios that organizes the initial sale and subsequent trading of the virtual currencies, but other platforms, including Binance and Bitci, are also growing.
Hear Tech Tent: When Crypto Met Soccer on BBC Sounds.
Socios told BBC News that he had sold $ 270 million to $ 300 million worth of coins through his app. I wouldn’t say how much money goes directly to the clubs.
Buyers must first convert their money into the company’s own cryptocurrency, Chiliz.
The research, conducted by crypto analysts Protos, suggests that many buyers are speculatively exchanging their tokens like other cryptocurrencies in an attempt to make money.
But the value of many fan tokens had decreased since the clubs initially sold them.
BBC News asked all Premier League teams and some of the top European teams about their plans and opinions on the new trend.
Only one was happy to comment.
A Brighton and Hove Albion spokesperson said: “We have not sold these products and we have no plans to enter these markets.”
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Since cryptocurrency products are based on a public ledger, known as a blockchain, Protos was able to determine:
Lazio, Manchester City, Porto and Santos appeared to generate the most sales
the fan tokens that generated the most revenue were Lazio’s, up to $ 130 million
Manchester City and Lazio tokens had fallen the most in value – 50% and 70% since the end of the first trading day.
The chips of two clubs, Inter Milan and Turkish Trabzonspor, had increased in value more than Bitcoin over the past year.
“Fan tokens are traded more actively than you might expect for this type of fan engagement product,” said Protos news director David Canellis.
“In general, small cryptocurrencies like these fan tokens can be incredibly volatile due to the small number of people wanting to trade them.
“Speculators know this, so I would consider that much of the trading in the fan token markets is driven exclusively by speculators looking for short-term profits.”
Socios disputed the claim that many of its users were speculators, saying that the “vast majority” had tokens to interact with their clubs, and that “the majority only had a few tokens.”