In the global sports year, how should the 2024 pan-sports sector "seek the sword by carving a boat"?

Author: Frank, Foresight News

The year 2024 is set to be a major year for top global sports events, from the ongoing 2023 Asian Cup (January 12 to February 10) to the mid-year European Championship, known as the "mini World Cup" (June 14 to July 14), and the Paris Olympics opening in July (July 26 to August 11), not to mention the U.S. presidential election on November 5. Major sports and political events will span the entire year.

In particular, the European Championship and the Olympics occurring back-to-back from June to August are international sporting events that attract global attention, boasting significant international influence and fan bases, which will undoubtedly bring immense attention and speculation to related sports tokens.

This article aims to briefly outline the sports category tokens worth paying attention to, and by reviewing the price trends of leading tokens during the 2021 European Championship and the 2022 World Cup, it attempts to glimpse the potential trading patterns behind this year's global events.

Which sports category tokens are worth watching?

"What's rolling on the green field is not a football, but gold." Sports-related tokens have always been among the most cyclical and speculative investment targets in the crypto world.

If categorized, they can be roughly divided into three types: sports public chains (Chiliz, TOPGOAL, etc.), team/star fan tokens (SANTOS, BAR, CITY, etc.), and prediction & betting-related tokens (sports NFT categories will be set aside for now).

Sports Public Chains

Chiliz (CHZ)

First and foremost is Chiliz (CHZ), which, as a blockchain fintech provider for sports and entertainment, has been the foundational blockchain platform for many football clubs to issue fan tokens and has launched interactive and reward applications for fans in the sports and entertainment industry on Socios.com.

On Socios.com, fans can purchase CHZ and exchange it for a club's fan token, allowing them to vote on club matters and even participate in management (from jersey design to daily governance voting) or interact with players.

Currently, the token CHZ has a market capitalization of approximately $880 million, making it the absolute leader in the sports sector by market cap.

TOP GOAL (GOAL)

The Web3 football metaverse platform TOPGOAL allows users to trade official digital player cards and participate in football games, aiming to collaborate with world-renowned stars and clubs for official licensing to create new digital virtual experiences and entertainment consumption methods for stars, clubs, and fans.

Many well-known stars, including Del Piero, Michael Owen, Guti, and Rivaldo, have already joined, and GOAL is the governance token of TOP GOAL, with a market cap of only about $2 million at the time of writing.

Team/Star Fan Tokens

Next are the fan tokens issued by various teams/clubs based on blockchains like Chiliz, where holders typically receive exclusive rights, including voting privileges and exclusive rewards from the club.

As of the time of writing, Chiliz has partnered with many top football clubs such as Manchester City, Arsenal, Barcelona, Atletico Madrid, Juventus, Roma, AC Milan, Inter Milan, and Paris Saint-Germain, issuing a total of 63 fan tokens corresponding to these teams, with notable ones including:

• AC Milan Fan Token (ACM)
• Tottenham Hotspur FC Fan Token (SPURS)
• Paris Saint-Germain Fan Token (PSG)
• Juventus Fan Token (JUV)
• FC Barcelona Fan Token (BAR)
• Portugal National Team Fan Token (POR)
• Atletico de Madrid Fan Token (ATM)
• Inter Milan Fan Token (INTER)
• Mexican Football Club Fan Token (SAN)

Additionally, leading exchanges have also collaborated with top teams to issue fan tokens (most of which are also based on Chiliz), such as LAZIO, SANTOS, and PORTO fan tokens, which are widely regarded as part of the "Binance ecosystem" based on the BNB Chain.

However, from a general statistical perspective, as of the time of writing, Binance has launched a total of 10 fan tokens, including (team types, same below):

• Santos FC Fan Token (SANTOS)
• S.S. Lazio (LAZIO)
• FC Porto Fan Token (PORTO)
• FC Barcelona Fan Token (BAR)
• Manchester City Fan Token (CITY)
• Paris Saint-Germain Fan Token (PSG)
• Juventus Fan Token (JUV)
• AC Milan Fan Token (ACM)
• Atletico de Madrid Fan Token (ATM)
• AS Roma Fan Token (ASR)

OKX has launched a total of 6 fan tokens, including:

• Argentine Football Association Fan Token (ARG)
• Portugal National Team Fan Token (POR)
• Flamengo Fan Token (MENGO)
• Trabzonspor Fan Token (TRA)
• Manchester City Fan Token (CITY)
• Galatasaray Fan Token (GALFT)

Prediction & Betting Types

In addition, the demand for prediction & betting types often sees a surge during major sports & political events, especially global events like the World Cup, European Championship, and the U.S. presidential election.

Taking the leading prediction market Polymarket as an example, its trading volume exceeded $50 million in January, setting a monthly historical high.

Among the most notable driving factors are the recently concluded Salvadoran presidential election predictions, whether the spot Bitcoin ETF will be approved, and ongoing predictions for the winning team of the 2024 European Championship, the 2024 U.S. presidential election, Federal Reserve rate cuts, and Democratic candidates for the 2024 U.S. presidential election.

However, Polymarket has not issued a token, and other prediction markets like Aver and BetDEX have shallow betting pools and have also not issued tokens.

As the European Championship, Olympics, and U.S. election approach in the second half of the year, participating in the corresponding betting pools for each event could be a rich investment opportunity.

"First a surge, then a drop" historical pattern?

Looking back at historical trends, it can be observed that tokens related to the broader sports sector generally follow the historical pattern of "first a surge, then a drop" as major sports events approach, with the specifics of how early price movements occur and their trajectory varying by situation.

Since such sports events are typically held every four years, the time span relative to the development of the crypto market is considerable. Therefore, this article will only use the most recent time points of the 2021 European Championship and the 2022 Qatar World Cup as examples, combining the leading sports public chain token CHZ with fan tokens SANTOS and PSG on Binance for a simple review.

2021 European Championship

From June 12 to July 12, 2021, the 2020 European Championship commenced (Note: originally scheduled for 2020, postponed by a year due to the pandemic).

Taking the leading sports token CHZ as an example, reviewing the secondary market price performance four months before the tournament and throughout the event reveals three distinct phases:

• Four months before the event, early surge: Around February 12, CHZ began to strengthen gradually, rising from $0.3 USDT on February 12 to a peak of $0.9449 USDT on March 12, a 30-day increase of over 214%;
• Two months before the event, forming a double top: However, from March 12 to around April 16, CHZ fell to a low of $0.36 USDT, a drop of over 60% from the peak, then rebounded to a high of $0.84 on April 16, forming a double top, and subsequently continued to decline from that high;
• Throughout the event, fluctuating decline: In the week leading up to the opening on June 12, CHZ was relatively strong, but on the opening day, it fell sharply by over 7%, then continued to decline, reaching a low of $0.178, a drop of over 80% from the high four months prior;

Additionally, the Paris Saint-Germain fan token PSG followed a similar trajectory—beginning to move three months before the event, quickly completing a surge cycle within a month and then continuously declining, with further drops after the event began:

• Three months before the event, early surge: Around March 10, PSG surged by 52% on that day, then rose from a low of $10.862 USDT to a peak of $59 USDT on April 27, a 47-day increase of over 443%;
• Two months before the event, peak decline: From April 27 to just before the opening, PSG fell to $10.78 USDT, nearly returning to its starting point, a drop of over 80% from the peak. On the opening day, June 12, PSG fell sharply again, with a fluctuation of over 10%;
• One month after the event, new highs: Strangely, after the European Championship concluded, PSG began to rise rapidly, increasing from $15 USDT to $61.5 USDT within a month, a rise of over 310%;

2022 Qatar World Cup

From November 20 to December 18, 2022, the Qatar World Cup commenced.

Again, using the leading sports token CHZ as an example, reviewing the secondary market price performance five months before the tournament and throughout the event reveals three distinct phases:

• Five months before the event, short-term bottoming: Around June 18, five months before the event, CHZ hit a short-term low of $0.0811 USDT, then began a two-month slow upward cycle—rising from $0.0811 USDT on June 18 to a peak of $0.265 USDT on August 24, a 66-day increase of over 226%;
• Three months before the event, forming three peaks: After reaching the first peak on August 25, CHZ set the second and third peaks on September 23 and November 7, respectively, forming a three-peak pattern;
• Throughout the event, continuous decline: In the week leading up to the opening on November 20, CHZ rose over 50% in just five days—from a low of $0.178 USDT on November 14 to $0.275 USDT on November 19, but then plummeted, dropping nearly 20% on the opening day, and continued to decline throughout the event, reaching a low of $0.1123 USDT on December 17, a drop of nearly 60% from the peak a month prior;

Additionally, the Binance-associated fan token SANTOS also began to move about four months in advance, forming a double top pattern three months before the event, followed by continuous declines, with a similar "three-phase" pattern:

• Four months before the event, beginning to move: Around July 15, four months before the event, SANTOS began to move, with a daily fluctuation of 15%, then entered a rapid upward cycle lasting a month—rising from $3.82 USDT on July 15 to a peak of $21.49 USDT on August 19, a 34-day increase of over 462%;
• Three months before the event, forming a double top: After reaching the first peak on August 19, SANTOS fell to a low of $9.8 USDT, a drop of over 50% from the peak, then rebounded and set a new high of $22.67 USDT on September 25, forming a double top;
• Throughout the event, continuous decline: After reaching a new high on September 25 until the event opened, SANTOS continuously declined, losing over 50% in just a few days in the half-month leading up to the opening, and dropped nearly 20% on the opening day, continuing to decline thereafter;

Conclusion

Overall, whether during the 2021 European Championship cycle or the 2022 Qatar World Cup, sports public chain tokens represented by CHZ typically start moving 4-5 months in advance, quickly surging within just 1-2 months, with increases often exceeding 200%, and may form at least a double top during this period.

The trends of fan tokens like SANTOS are generally similar, with slight differences in details:

• In terms of timing, compared to CHZ, they tend to start moving about a month later (3-4 months in advance), and the overall cycle rhythm is shortened by about a month;
• In terms of increases, they tend to have "built-in leverage," with increases often reaching 300%-400% or more, higher than the approximately 200% increase of CHZ;

However, as the European Championship and World Cup approach, early speculative funds often sell at high points, causing these tokens' prices to typically peak and decline 2-3 months before the event opens, with a risk of sharp drops shortly after the event begins.

From this perspective, the current timing, just ahead of the new global event cycle starting in June 2024, serves as a critical initiation point for sports sector "seeking the sword in the boat," offering strong reference value.

Therefore, the truth in the investment field of "buying expectations, selling facts" is almost a rule of thumb for the sports sector (major event nodes) with strong cycles and the potential for forward-looking layouts regarding related tokens.