Sports blockchain platform Chiliz has announced that it will be investing $50 million into expanding into the US market, according to CEO Alexandre Dreyfus.
The Malta-based company enables sports teams to offer cryptocurrency tokens to their fans. These tokens allow fans to vote in polls concerning their teams as well as receive special promotions and rewards.
Chiliz says this ability to engage with global fanbases creates a “new digital revenue stream” for sports organizations.
Chiliz Coming to America
After its successful run with several prominent European football clubs, Chiliz is now opening an office in the US. There, it hopes to target the country’s top sports franchises.
“We head to the U.S. with a proven track record in generating millions of dollars of revenue for some of Europe’s biggest sporting organizations,” Dreyfus said.
“That’s why we’re opening a New York office and investing $50 million into the country’s sports industry in order to launch Fan Tokens with leading franchises from the five major U.S. sports leagues,” he continued.
FanMarketCap, a fan token price and market information tracker run by Chiliz, currently stands at just under $200 million. Aside from adding more football clubs in the coming weeks, Dreyfus expects FanMarketCap to grow because the company is also in talks with Formula One and e-sports teams.
In 2019, Juventus became the first major football club to collaborate with Chiliz for the release of a fan token. Since then, other prominent clubs, such as Barcelona, Paris St. Germain, and most recently AC Milan, have followed suit. AC Milan generated $6 million on the day its token launched.
Connecting Fans with their Teams
Joseph Edwards, head of research at cryptocurrency brokerage Enigma Securities, said that fan tokens are arriving at just the right time for sports organizations and their fans, according to a Reuters report.
Hit by restrictions related to the COVID-19 pandemic, clubs have needed a way to make up for lost revenue. Unable to attend matches, fans have never felt more disconnected from their favorite teams. Tokens offer solutions to both these issues, wrapped in the package of cryptocurrencies, which Edwards said are more popular than ever.
“It just hits right in the current moment that sports entertainment finds itself in,” he said.
