I’m not normally interested in studies on trends in equities and crypto but a new one from TradingBrowser.com, a crypto exchange review site, caught my eye. It looks at Soccer Fan Tokens, NFTs (non-fungible tokens) that allow team fans to show their support and hopefully reap some benefits now and in the future.

This being crypto, what could possibly go wrong?

Generally a token starts out with a price in the low dollars, pretty much in line with scratch card lottery tickets. It also means that for $100 a fan can have a pile of tokens, and as we know the novice investor loves to have a pile of an instrument because a small price move feels like the chance of a big win. Us veterans may chuckle but we all know deep down inside that our inner gambler just knows this is right. This is just one of many flawed pieces of logic embedded in humans, so it’s no surprise that it is taken advantage of for soccer fan tokens.

As a crypto-fan I love the idea of fan tokens but as no follower of footy the enthusiasm ends there. Without doubt hundreds of millions, perhaps billions of people are mad for soccer so the idea of holding a ticket that enables you to get perks and even apply those tickets to a voting process to use in polls for things like selecting the motto for the team for that season seems like a product worthy of sales.

Arsenal, the famed U.K., London-based club, has a fan token worth in market cap $15 million, which looks useful when a year’s total commercial activity pulls in $120 million sales in total.

Yet the story is not a happy one for anyone buying these tokens as an investment. Surely these can’t be classed as securities, but I’m sure they will be and probably already are somewhere in the bowels of U.S. regulation. If you buy a baseball card you’d never dream of getting interfered with by the financial referee, but this is crypto, so if you buy fan tokens of the same value of say an official soccer shirt, maybe you are an investor deserving the protection of the long arm of securities law.

The evidence of poor soccer fans being bilked out of their hard earned is there for all to see...wait, these are fan tokens not Enron shares. Fans buy these tokens to own them in the same way as they buy scarves; they don’t feel cheated when they get shrunk in the wash, it’s not about money, even if being a football supporter is hardly a cheap habit these days. It is about being part of something.

Now there is a secret rule in investing and that is an “investment” pays you in the coin you want. A glory stock will likely lose you money because it is fun and exciting to own. If you want to make money you have to buy shares that have to bribe you heavily to hold them. If you want to gamble on volatile stocks your financial return will be low to negative because you got your returns in adrenaline and as anyone who goes to the cinema or Disneyland will attest, fun and excitement don’t come cheap.

Thus fan tokens should lose the buyer—I won’t say investor—money because they should get dividends in the form of pleasure of ownership. Of 23 teams in the research only 3 are up over 2022-2023: Santos 23%, Napoli 21% and Monaco (Billionaires United) up a mere 1%.

If you had magically picked the top five performing fan tokens—Santos, Napoli, Monaco, Lazio and Arsenal—and bought equal amounts, you would find yourself 5.8% in loss for your support and if you were skilled enough to pick the five worst performers you would have lost 80% of your money. It is hard to pick a fan token that wouldn’t have lost you more than half of your money with 16 of the 23 teams fan tokens falling by more than half.

There are £850,000 worth of Leeds United fan tokens in circulation at the bottom of the league and $26 million for Santos at the top of the league, so while the regulators try to put crypto back into its box, it will be a long time before they turn their attention to a global market which is miniscule.

So the crypto speculator has one call to make. Are sports fan tokens a huge wave of the future or just a passing novelty? Obviously if it’s the latter brave believers should be hoovering them up. Fan tokens are like other ephemeral media like bubblegum cards and comics, and can therefore never possibly be worth much in the future… oh wait.