Fan tokens are one of the new additions to the global crypto market. Though crypto has been a hot topic for investors for years, fan tokens suddenly came to the fore. There were different reasons for their rise, but the following relapse shocked the investors. The investors were musing about investing their capital in these tokens, but the sudden changes have made them reconsider their plans.
The interest in cryptocurrencies has grown beyond finance. Investors consider them for the diverse benefits these can bring in the near future. The global adoption of crypto in different industries and its growing benefits is why different types of tokens have come to the market. The recent fluctuations might be a passing event in the market, but these tokens might have a lasting impact on the market.
Here is a brief overview of the rise of fan tokens and why they saw these fluctuations.
Fan tokens pump
Crypto tokens pump is a common phenomenon, and the recent change for fan tokens is no different. The hype for fan tokens can be seen from their initial launch, which attracted £260 million. Different prestigious football clubs in Europe have launched their fan tokens providing different options for fans to engage with their favorite clubs. Fan tokens can be used to purchase different commodities from the supported organizations.
The recent data shows that fan tokens were amongst the top gainers on Binance and other exchanges. More and more fans rallied towards the purchase of these tokens. The available data shows that the Santos token rose more than 135% due to market bullishness. BoringDAO saw a rise of 47.67%, while Alpine added 27.35%. Also, if we look at the performance of Stargate Finance, it added 41.94%, while Efforce added 32.55%.
There are dozens of fan tokens listed on Binance, and fans can purchase them. Interested users can purchase these tokens using Chiliz (CHZ), which is a token specifically there for these purchases. As a user purchases Chiliz, they have to make an account on its fan token platform and get the desired token.
Reasons for the rise and fall of fan tokens
The rise of fan tokens as the result of the recent pump has puzzled investors. Market analysts have cited various reasons for the rise of these tokens. One of the main reasons for their rise is the start of the game season. Football season has begun with the start of the English Premier League as it kicked off earlier this month. Also, Spanish top-flight football began last weekend, creating a commotion. Thus, fans of different clubs want participation and have invested in the said tokens.
Another reason cited for the rise of these tokens is the rising inflation in Turkey. The value of the Turkish Lira has declined while Binance has trading pairs with the Turkish Lira. So, the pump from Turkish investors can be cited as another reason for this. What is most interesting for the market is the decline in the market value of fan tokens. The value of the Santos token saw a decline of 38.45%, while BoringDAO shed 36.96%. These changes reversed the gains for investors.
The possible reasons for the dump include social media promotion from certain investors for profit, rug pulls, or price manipulation. The coming days will clarify how certain users benefited from their rise.
The recent few hours brought crypto fan tokens to the fore as they saw a tremendous rise. The change proved momentary as a result was a reversal of gains. Most of these tokens couldn’t retain their gains and shed value. Analysts are divided over the reason for these fluctuations, but one of the evident ones is the promotion for the profit of a specific group.