Valuation of cryptoassets: The case of fan tokens in european soccer teams

Abstract

Blockchain technology has arrived to transform the business models of companies and financial transactions. In addition to the irruption of cryptocurrencies that has been observed since the birth of Bitcoin in 2008, it is observed that the use of this technology is beginning to be applied in use cases of the real economy. In this study we focus on fan tokens, a cryptoactive that provides its holder with a utility, in this case the emotional bond with the entity that launches the token and the possibility of participating in voting, promotions or events related to the entity. Due to the emotional force that football has, fan tokens have become a trend in recent years. The question that arises is how we should value a crypto asset that does not have a financial asset or a monetary flow behind it, and that simply has that emotional bond with the club. In this study we propose a simple linear regression model in which the market value of the fan token (measured by its market capitalization) is a function of the number of followers the club has (measured by the number of followers of the club on Twitter). Using data from the main European football clubs that have issued fan tokens to date, the regression of the model shows that the parameter that relates followers to fan token market capitalization is 95% significant, and the R2 of the model shows that this A single parameter can explain almost half of the value of the fan token.