Гастробайтер

Статус
Offline
Joined
7/23/21
Messages
4
Reaction score
0
No matter how you spin it, the FIFA World Cup is one of the most significant sporting (and not only) events in the world. According to FIFA's data, there are 5 billion football fans worldwide, with Latin America, the Middle East, and Africa having the largest fan bases.

This year, the event will take place in the Middle East for the first time in history. There is another feature that sets it apart from previous years. The level of cryptocurrency acceptance has increased significantly since the last World Cup, such as the fact that one of the main sponsors of the event is the Crypto.com platform.

webp

Crypto.com - Exclusive Sponsor of the 2022 World Cup

According to Chainalysis, cryptocurrency adoption in the Middle East has been growing faster than anywhere else over the past year. This creates a combination of triggers for the growth of sports tokens and NFTs. But let's take it step by step.

Football and Crypto​


In their report "When Crypto Meets Football," the KuCoin cryptocurrency exchange revealed how involved crypto investors are in sporting events. This report is based on surveys of 20,180 investors from January to September 2022 and 8,022 users in KuCoin communities in November 2022.

webp

Football - The Most Beloved Sport Among Crypto Enthusiasts

Key survey findings indicate that football is the most popular sport among crypto enthusiasts:

4 out of 10 traders in France, Spain, Vietnam, Germany, and Brazil consider themselves football fans.
70% of investors will watch the 2022 World Cup.
webp

Ranking of Countries with the Highest Percentage of Crypto Investors among Football Fans

Among crypto investors who are football fans, 35% traded NFTs in the last 6 months, and 42% are interested in investing in sports NFTs.

Fan Tokens​


According to KuCoin's survey, 48% of football fans among crypto traders are interested in trading fan tokens of national teams during the World Cup. Fan tokens are a type of social tokens that are aimed at artists and sports teams with large fan bases. They act as a bridge between sports teams and their fan base, facilitating communication between them.

webp

Market Capitalization and Trading Volume of the Top 20 Fan Tokens

For example, with these tokens, fans can:

Pay for services.
Confirm their community membership.
Attend events organized by sports clubs for free.
Get VIP access to exclusive goods and rewards.
Participate in votes related to the team or club, and more.

Fan tokens have been adopted by many international sports organizations. The majority of projects are naturally associated with football, and renowned football clubs such as Barcelona, Inter Milan, Juventus, Manchester City, and others have their own fan tokens. Additionally, teams in the NBA and NHL leagues, as well as participants in the Formula-1 tournament, are involved in issuing fan tokens. You can view the list of fan tokens on CoinGecko.

Overview of Fan Token Projects and Issuers​

How does the fan token ecosystem work, and what tasks does it fulfill? It primarily brings together three parties:

Issuers: Assist sports teams in issuing their tokens. Their motivation is to earn commissions from transactions, attract users to exchanges, and build a reputation. Major issuers include Binance, Socios, Bitci.

Sports teams: Use fan tokens for various purposes, such as rewarding fans and attracting cryptocurrency users to sports fan clubs.

Community: Fans and investors receive various benefits from owning tokens from a specific team.

webp

Capitalization of fan tokens by sports type: yellow column - the number of projects, gray column - their capitalization. In the pie chart: how many projects each issuer has launched
As for the number of fan tokens issued, Binance has 4, Socios has 172, and Bitci has 45. However, Binance surpasses other exchanges in terms of capitalization and the trading volume of fan tokens.

Case for Earning with Fan Tokens​

It's not surprising to see speculative interest in fan tokens from fans, who are often avid gamblers. Many cryptocurrency companies actively sponsor the sports gaming industry. Notably, 92% of these funds are invested by the five largest cryptocurrency companies: Coinbase, FTX (RIP), Crypto.com, Webull, and Socios.

webp

In anticipation of the FIFA World Cup 2022, the CHZ token rose by over 70%
Currently, the primary way to earn with fan tokens is through short-term trades leading up to or during sporting events. One of the tokens that demonstrated significant growth in the weeks leading to the FIFA World Cup 2022 was the native cryptocurrency of the Socios.com platform, Chiliz URL='https://twitter.com/search?q=%24CHZ&src=cashtag_click'. Over the month before the event, the token's price increased by over 70%.

This price increase was driven by a massive influx of speculators. On-chain data from IntoTheBlock showed that one month before the tournament, the number of short-term trader addresses increased by 215%, while holder addresses only increased by 12.61%.

webp

Number of created CHZ wallets (holders, mid-term holders, traders) over the last few months
After a few weeks of price pumping, the classic "sell the news" pattern emerged, and on the opening day of the championship, the token's price dropped by 19%. Nevertheless, as history shows, buying CHZ before major sporting events is a decent trading idea (see the figure below).

webp

CHZ token price behavior during past sports events
You might wonder why bother with all these tokens when you can simply go and place bets on some 1xbet? The answer is risk control. In betting, you rely entirely on luck and can't set a stop-loss. In trading, you can find a good setup and work it within a trading system with clear risk/reward. This is very important.




Fan tokens have been adopted by many international sports organizations. The majority of projects are naturally associated with football, and renowned football clubs such as Barcelona, Inter Milan, Juventus, Manchester City, and others have their own fan tokens. Additionally, teams in the NBA and NHL leagues, as well as participants in the Formula-1 tournament, are involved in issuing fan tokens. You can view the list of fan tokens on CoinGecko.

Overview of Fan Token Projects and Issuers​

How does the fan token ecosystem work, and what tasks does it fulfill? It primarily brings together three parties:

Issuers: Assist sports teams in issuing their tokens. Their motivation is to earn commissions from transactions, attract users to exchanges, and build a reputation. Major issuers include Binance, Socios, Bitci.

Sports teams: Use fan tokens for various purposes, such as rewarding fans and attracting cryptocurrency users to sports fan clubs.

Community: Fans and investors receive various benefits from owning tokens from a specific team.

webp

Capitalization of fan tokens by sports type: yellow column - the number of projects, gray column - their capitalization. In the pie chart: how many projects each issuer has launched
As for the number of fan tokens issued, Binance has 4, Socios has 172, and Bitci has 45. However, Binance surpasses other exchanges in terms of capitalization and the trading volume of fan tokens.

Case for Earning with Fan Tokens​

It's not surprising to see speculative interest in fan tokens from fans, who are often avid gamblers. Many cryptocurrency companies actively sponsor the sports gaming industry. Notably, 92% of these funds are invested by the five largest cryptocurrency companies: Coinbase, FTX (RIP), Crypto.com, Webull, and Socios.

webp

In anticipation of the FIFA World Cup 2022, the CHZ token rose by over 70%
Currently, the primary way to earn with fan tokens is through short-term trades leading up to or during sporting events. One of the tokens that demonstrated significant growth in the weeks leading to the FIFA World Cup 2022 was the native cryptocurrency of the Socios.com platform, Chiliz URL='https://twitter.com/search?q=%24CHZ&src=cashtag_click'. Over the month before the event, the token's price increased by over 70%.

This price increase was driven by a massive influx of speculators. On-chain data from IntoTheBlock showed that one month before the tournament, the number of short-term trader addresses increased by 215%, while holder addresses only increased by 12.61%.

webp

Number of created CHZ wallets (holders, mid-term holders, traders) over the last few months
After a few weeks of price pumping, the classic "sell the news" pattern emerged, and on the opening day of the championship, the token's price dropped by 19%. Nevertheless, as history shows, buying CHZ before major sporting events is a decent trading idea (see the figure below).

webp

CHZ token price behavior during past sports events
You might wonder why bother with all these tokens when you can simply go and place bets on some 1xbet? The answer is risk control. In betting, you rely entirely on luck and can't set a stop-loss. In trading, you can find a good setup and work it within a trading system with clear risk/reward. This is very important.

Choosing a Trading Strategy​

The performance of fan tokens' prices can be associated with the success of specific teams' performances. Therefore, I would first focus on the fan tokens of national teams that are directly participating in the World Cup. You can try opening cautious long positions based on specific triggers, such as buying the token of the favorite team before a match against a weaker team.

Secondly, you should look for technical patterns and monitor trading volumes of the tokens in the days leading up to the games.

Thirdly, strict risk management is required: you should open trades strictly according to your trading system. Given the current market conditions (fad on CEX exchanges, bankruptcies of crypto companies, liquidity issues), it's crucial to act with extreme caution and assess risks soberly.

Analysis of Past Matches​

Let's examine four main instruments that are most relevant to our strategy: the tokens of Portugal (POR), Argentina (ARG), Spain (SNFT), and Brazil (BFT). They have small market capitalizations (ranging from $3 to $14 million), low liquidity, and are highly manipulative, so you should keep this in mind.

webp

List of national team tokens participating in the championship
As seen from the chart below, the rally of fan tokens started 11 days before the World Cup began. Tokens showed growth ranging from +85% to +134%. Right after November 20, all tokens entered a deep correction, with an average decline of 58% over 9 days.

webp

Price behavior of national team tokens before the championship and during it
For the sake of sporting interest, I conducted a small backtesting of the first four matches, analyzing the price movements of these tokens before, during, and after each match.

Argentina vs. Saudi Arabia - November 22, 2022

Score: 1:2

Nearly 36 hours before the match, ARG token grew by 40% from the local minimum. According to the setup with reasonable risk, it was possible to gain 15-17% here. Right after the start of the game, ARG started to decline, ending the match down by 30%. The catalyst for such a sharp drop was Argentina's first defeat in almost 3.5 years.

webp

Spain vs. Costa Rica - November 23, 2022

Score: 7:0

Around 12 hours before the game, SNFT showed a good long setup with a trend breakout, confirmed by volumes. You could have potentially gained 44%. Right after the start of the game, volumes on the instrument increased significantly, and in the first half-hour, the token's price rose by 11%. Despite Spain scoring three goals, the price began to drop, ultimately falling by 23%. Interestingly, fun fact, since 1966, there have been only two cases when any team did not take a single shot in a match: Costa Rica in this game and Costa Rica against Brazil in 1990.

webp

Brazil vs. Serbia - November 24, 2022

Score: 2:0

Over a day and a half before the match, BFT token had grown by 88.5% from local lows. Approximately a day before the game, there was a potential upward movement of 30%, entering based on a setup on the breakdown of the descending trend. In the first half, BFT showed a modest increase of about +3%. However, after the tournament ended, the price began to gradually decline, ultimately showing a 5.3% drop.

webp

Portugal vs. Ghana - November 24, 2022

Score: 3:2

In the case of the POR token, there was no formalized long setup. Nevertheless, the token had increased by 21% from local support two days before the match. Similar to the three previous cases, right after the start of the game, the token was aggressively sold, leading to a 19% correction.

webp

Results of all past (until November 29, 2022) matches of the national teams of interest are summarized in the table:

webp

Price behavior of national team tokens shortly before the start of the match/during the match/throughout the championship
What conclusions can we draw from this data? In all cases, there was a similar pattern: a price pump one to two days before the competition, followed by a token sell-off since the beginning of the event. On-field events during the matches had almost no impact.

From the gathered statistics, we see that:

Within a day of the match, the price always showed growth within a certain range: up to +90% from the local minimum. Of course, it's impossible to capture these movements entirely, but it's reasonable to look for long setups a day or two before the game.

In half of the cases, after the start of the match, token prices rose by a slight percentage (3-11%), but they still went into a correction.

Regardless of the score, all tokens fell in price by about 10% by the end of the match.

In the time interval between matches, the tokens of national teams fell by 25-50%.

The volatility of BTC during matches was negligible (0.1-0.9%) and, in my view, had no influence on the quotes of fan tokens.

Since the opening of the tournament, the tokens fell by 50-77%.

Overall, due to the market's current unfavorable state, we don't expect the anticipated super hype and green candles during the matches. But you can still catch good movements.

What I Would Do​

It makes sense to pay attention to the following matches (times are in MSK):

December 1, 22:00 - Spain vs. Japan
December 2, 18:00 - Portugal vs. South Korea
December 2, 22:00 - Brazil vs. Cameroon

According to the odds from a well-known bookmaker, the national teams with the highest chances of winning the FIFA World Cup (in descending order) are Brazil (3.6), France (6.5), Spain (8), Argentina (9), Portugal (13), and Germany (13). Meanwhile, their upcoming opponents in the nearest matches (dates mentioned above) have odds as follows: Japan - 555, South Korea - 1100, Cameroon - 1100. Of course, these odds for winning the final are only a rough indicator at the current time (as of 11/29/22). However, they provide a general understanding of the teams.

Let's take the example of the Brazilian national team's token, BFT. Brazil is the consensus favorite according to sports analysts for this championship. A brief analysis of the two matches played by Brazil reveals a certain price pattern on the token's chart. Initially, for a couple of days, the price hovers in a sideways consolidation on lower volumes (1), followed by strong selling on extreme volumes (2), and then a buyer comes in and pumps up the token on average volumes (3). During the day before the match, the token starts to be sold, and the price declines.

webp

Price chart of Brazil's national team token, BFT, from the beginning of the tournament
Will something similar happen in the upcoming match against Cameroon? We'll see. In football, as we know, anything can happen. But Cameroon is objectively much weaker than Brazil. Therefore, it wouldn't hurt to look for long signals on the chart of the Brazilian token in the days before the match. The same applies to the other tokens we've selected: their respective national teams will be playing against weaker teams until the round of 16. So, go for it!

In Conclusion​

The grand football feast on the fan token charts did not materialize. As they say, the train has left, and the main profit from this story was realized before the start of the World Cup. However, there's always room for trading local situations in short timeframes, why not? But if you have no experience in trading, I advise against it.

In general, the event did not meet expectations, at least not yet. Obviously, the entire cryptocurrency market is currently in a slump. As teams are eliminated from the tournament and after its completion, there is a possibility of a sudden crash of all coins associated with football. Therefore, it seems like a good idea to short the FOOTBALL index from Binance. In any case, it will become clearer towards the end of the World Cup.
 

Wazgem

Wazgem

Participant
Статус
Online
Joined
7/3/21
Messages
17
Reaction score
0
It’s better to make money at the bookmaker
 
Top