Anticipatory gains and event-driven losses in blockchain-based fan tokens: Evidence from the FIFA World Cup

Aman Saggu, Lennart Ante and Ender Demir

Research in International Business and Finance, 2024, vol. 70, issue PA

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.

Keywords: Cryptocurrency; Blockchain; Fan Tokens; Football; Efficient Markets Hypothesis; Intraday Data (search for similar items in EconPapers)
JEL-codes: G12 G14 G41 L83 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Working Paper: Anticipatory Gains and Event-Driven Losses in Blockchain-Based Fan Tokens: Evidence from the FIFA World Cup (2024)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:riibaf:v:70:y:2024:i:pa:s0275531924001260

DOI: 10.1016/j.ribaf.2024.102333

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