The Arsenal Fan Token (AFC) launched in October 2021, in partnership with Chilliz, offering holders the opportunity to vote on certain club decisions, get involved in polls and other interactive elements, and potentially enjoy profits from token price movements. Tokens do share some similarities with cryptocurrencies like Bitcoin but are not commonly seen as a means of investment. Rather, they are used to enjoy a degree of governance and engagement for sports fans.

Cryptocurrency enjoys a strong link to sports. Companies crypto.com have embarked on extensive and expensive sports sponsorship deals to attract sports fans. Players like Ronaldo, teams like Barcelona, and even leagues like the NBA have all launched their own NFT collections. And, a growing number of bookmakers and websites offer soccer betting with Bitcoin and other cryptocurrencies. Crypto betting sites have proven popular because of instant withdrawal times as well as anonymity and privacy. Another emerging trend is the launch of fan tokens in various sports, with football proving an especially popular sector of the market.

AFC launched in October 2021 at $5.75. Within a year, it had slumped to less than $2 before recovering to $3.90 in January 2023. The token is currently priced at $0.90. Fan tokens are susceptible to price changes and can be extremely volatile. They can increase and decrease according to team performance, changes in management, and other factors that contribute to the success of the team.

With that said, Arsenal currently sits in 2nd place in the league. They are 7th in the new Champions League format, looking like a strong bet for automatic entry into the knockout stages. And former player Mikel Arteta is enjoying a five-year-long stint as manager.

The team is doing well, having finished last season in 2nd place. Despite this strong recent performance, the fan token hasn’t seen any positive movement. As such, it may be close to saturation point – everybody who is likely to buy tokens already has them. This could change if the Gunners can push on and win the league or the Champions League.

Something else that could see a change in token price is the club changing hands. The current owner, Stan Kroenke, became a shareholder of the club in May 2007 before being appointed to the board of directors in September 2008.

In April 2011, Kroenke’s business, Kroenke Sports & Entertainment, became a majority shareholder before taking 100% ownership of the club in 2018. There have been moves to buy the club. Former Arsenal legend Dennis Bergkamp backed a move by Spotify owner Daniel Ek to buy the club in 2021.

The bid was ultimately unsuccessful, but another club legend, Mathieu Flamini has also expressed an interest in one day buying the club where he played nearly 250 games. Although there have been some voices of discontent during Kroenke’s time, he has overseen a decent run of performance, good transfers, and a stable management system. Although a change in ownership could lead to price changes, it would likely take a massive investment to really push the prices up.

Fan tokens share some similarities with cryptocurrencies. They are built on the blockchain and they can be traded through exchanges and other platforms. However, they are traded based entirely on fan sentiment and feelings. They do not hold any intrinsic value and are not backed by any tangible or finite digital resource.

In that regard, they are more akin to meme coins than to utility coins like Bitcoin and Ether. As such, fan tokens are not usually used as a means of investment in the same way as other cryptos and that isn’t their intended purpose.

It is also worth looking at the fact that fan tokens, like cryptocurrency, are not yet fully regulated. Governments and government bodies are looking into regulation. A UK Parliament House of Commons report, published in October 2023, said that fan tokens should not be considered a form of fan engagement, suggesting that they should be taken as a type of cryptocurrency instead.

Fan groups and supporters have raised concerns about these tokens, and the report agreed that fans should not have to invest in cryptocurrency to engage with their clubs. It is possible to buy the AFC token using a debit or credit card, which means the group considers fan tokens to be forms of cryptocurrency, further suggesting that they will face the same regulations as the likes of Bitcoin.

The most common method to buy AFC tokens, however, is through the Socios.com app. The app offers access to more than 100 fan tokens. While many of these are football-based, buyers can also access tokens from F1 and the UFC. Socios has sponsored the Ballon d’Or prize since 2021, helping to attract new buyers.

App users need to buy $CHZ, or Chilliz, coins and then convert these into their chosen fan tokens. This requirement may be the reason fans and governing bodies oppose the use of tokens for fan engagement and may see further regulatory moves in the coming months and years.

The AFC token is only one of a growing number of fan tokens on the market. The largest, by market capitalization, belongs to Santos FC with a cap of $30 million. Other popular tokens include Barcelona’s BAR, Paris St Germain’s PSG, and Manchester City’s CITY tokens, which have market capitalizations of $22 million, $21 million, and $19 million respectively. Most have seen similar peaks and troughs in their price charts, and these will likely continue.

Fan tokens are becoming increasingly popular. Clubs claim they offer a unique and direct method for fans to engage with them. Some clubs offer special votes and other forms of engagement, even including access to special events, priority tickets, and the potential to meet or video players.

The tokens themselves are developed on the blockchain and they are commonly purchased using cryptocurrencies like Chilliz, although they can also be purchased using debit and credit cards in some cases. Prices are affected primarily by fan engagement and sentiment, and sentiment is driven by results and news regarding the team, its performance, and its players.

But, despite Arsenal continuing to perform well under manager Mikel Arteta, the AFC token hasn’t exactly set the world alight. If they were to win the league or the Champions League or be bought out by a billionaire with very deep pockets, this could change in the future.