Chiliz’s upward movement has already lost steam with arrival of World Cup and may continue its downward path
Chiliz (CHZ) was one of the tokens that drew the most attention with the arrival of the World Cup. Within days, the altcoin managed to go in the opposite direction of the market and rise while Bitcoin (BTC) and the altcoins were correcting. But is this CHZ performance sustainable?
First, it is necessary to understand what Chiliz is. CHZ is the main token of Socios.com, a blockchain-based sports and entertainment platform.
Socios has gained notoriety on the crypto market as it allows its users to participate in the governance of their favorite sports brands.
Observing the growth and development of the blockchain industry, several soccer teams launched their fan tokens on Socios.com. As a result, token holders from teams like Barcelona, Paris Saint-Germain and Juventus can participate and influence decisions related to the clubs they admire.
Anyone who wants to buy fan tokens needs to buy CHZ. In this way, it manages to move the soccer industry forward and make a connection with the blockchain market.
Why so much hype around Chiliz?
Socios.com launched the tokens of teams participating in the World Cup, such as Portugal and Argentina. With the hope of high volatility and possible profits that these altcoins could bring during the event, investors who wanted to speculate bought CHZ.
It is also important to highlight that the altcoin is related to several teams and not just one. This allows it to attract more users, something that was able to impact its price, with the help of analysts who bet on the rise of the token.
Chiliz experienced a 37% increase in just 20 days. Compared to Bitcoin, the primary cryptocurrency has only grown by 3% over the same period. Furthermore, on Nov. 7, 2022, CHZ reached the $0.29 mark, a price the altcoin had not reached in seven months.
May Chiliz continue to perform well?
Since the start of the World Cup on Nov. 20, CHZ has had a 30% correction, showing that its rise was not sustainable and was only due to hype.
While the token has its uses, is a driver of crypto adoption and is bringing fans of one of the world’s top sports to the blockchain industry, CHZ lacks the hot spots that would see it maintain a solid high outside of the soccer championship season or after the launch of a team’s token.
For Chiliz to appreciate in the coming years, Socios.com must perform well. This is because CHZ is a utility token and depends precisely on the engagement that its platform has so that it can grow.
It should be noted that not even the partnership between Socios.com and FanFest caused CHZ to undergo any positive movement in its price. The platform has collaborated with the leader in virtual events and streaming so that fan token holders can claim exclusive rewards anywhere in the world.
When considering investing in CHZ, believing that it may appreciate in value in the coming months, keep in mind that it will all depend on the timing of the market and the level of investor interest in the token, just as with other altcoins.
Chiliz was developed to mediate the relationship between fans and their favorite club, player or league. Therefore, while this purpose is not fulfilled, a sustainable increase in the token will not be seen.