CHZ, the native token of the Chiliz blockchain, which powers sports token fan creator Socios.com, surges as the UEFA football championship nears.
The token doubled in value in the months before the 2022 FIFA World Cup, only to slide later.
10X Research expects the FIFA scenario to repeat itself.
A cryptocurrency, representing an intersection of blockchain and sports, has recently emerged as a source of excitement to crypto markets as major digital assets trade listless.
CHZ, the native token of the Chiliz blockchain (CHZ), which powers the largest sports fan token creator platform, Socios.com, has risen 25% in seven days, reaching a two-month high of over 15 cents. Prices hit a three-week high of 16 cents early today, according to data source Coingecko.
The double-digit price surge is the third largest among the top 100 cryptocurrencies by market value, including bitcoin and ether. (Notcoin and dogwifwhat are best performers).
Excitement about the upcoming 24-country Union of European Football Associations (UEFA) Euro, which will be held from June 14 to July 14, seems to have amplified CHZ’s valuations. Most fan tokens are procured on Socios.com utilizing CHZ. Thus, the cryptocurrency represents the degree of interaction between fans and their favorite sports teams.
A much bigger rally unfolded in the lead-up to the 2022 FIFA World Cup. The token doubled in value to nearly 30 cents through the summer of 2022, topping out a day before the global sporting event, which kicked off on November 20, 2022. Prices tanked nearly 40% in December that year.
10X Research expects the FIFA scenario to repeat itself, ensuring more gains for CHZ by mid-June and a potential sell-off afterward.
“The Chiliz (CHZ) token rallied over 100% from the summer of 2022 until one day before the FIFA World Cup started on November 20, 2022 (lasted until December 18, 2022). Only to then decline by -60% one day before the start of the FIFA Soccer World Cup (from November 19, 2022). Markus Thielen, founder of 10X, said in a note to clients.
“This scenario might repeat itself. A slightly smaller version than the World Cup of 2022, the UEFA European Football Championship will be held from June 14, 2024, to July 14, 2024, with teams from 24 countries competing,” Thielen noted, adding that the company usually promotes its token around these events.
In general, sports tokens are vulnerable to “buy the rumor, sell the news” tendencies, representing a pre-event period of optimism and price rallies and subsequent price declines, a recent study titled “Anticipatory Gains and Event-Driven Losses in Blockchain-Based Fan Tokens: Evidence from the FIFA World Cup,” published in Research in International Business and Finance, revealed.
Football events are known to boost consumption and economic activity in Europe. A 2019 paper found a relevant direct statistical link between the market value of regional football clubs in Europe and the economic performance of the respective regions.
The availability of fan tokens and blockchains like Chiliz has made it easier to price in and measure sporting events' financial and economic impact.
