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Anticipatory Gains and Event-Driven Losses in Blockchain-Based Fan Tokens: Evidence from the FIFA World Cup

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  • Aman Saggu
  • Lennart Ante
  • Ender Demir

Abstract

National football teams increasingly issue tradeable blockchain-based fan tokens to strategically enhance fan engagement. This study investigates the impact of 2022 World Cup matches on the dynamic performance of each team's fan token. The event study uncovers fan token returns surged six months before the World Cup, driven by positive anticipation effects. However, intraday analysis reveals a reversal of fan token returns consistently declining and trading volumes rising as matches unfold. To explain findings, we uncover asymmetries whereby defeats in high-stake matches caused a plunge in fan token returns, compared to low-stake matches, intensifying in magnitude for knockout matches. Contrarily, victories enhance trading volumes, reflecting increased market activity without a corresponding positive effect on returns. We align findings with the classic market adage "buy the rumor, sell the news," unveiling cognitive biases and nuances in investor sentiment, cautioning the dichotomy of pre-event optimism and subsequent performance declines.

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  • Aman Saggu & Lennart Ante & Ender Demir, 2024. "Anticipatory Gains and Event-Driven Losses in Blockchain-Based Fan Tokens: Evidence from the FIFA World Cup," Papers 2403.15810, arXiv.org.
    • Handle: RePEc:arx:papers:2403.15810
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    More about this item

    JEL classification:

    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G41 - Financial Economics - - Behavioral Finance - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making in Financial Markets
    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism

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