Exemplary (non exhaustive) list of associated risks
What are the risks when investing in athletes?
As it is the case with any volatile asset, investing in athlete tokens does entail a number of risks. Such risks include, but are not limited to:
Underperformance of the underlying assets: Athletes performance can be lower than expected. This could be the case for a multitude of reasons such as injuries. In these cases the FANs stand the risk of not receiving any payouts and losing their initial investment.
Highly speculative investment risk: As outlined, athlete investments are blockchain based, meaning investors are exposed to crypto-assets. Such assets are highly speculative and present the risk of total loss of the invested capital. Moreover, the fact that there exists a certain opacity in the crypto-asset market, as well as the fact that regulation to date is very limited, means that there exist certain risks of manipulation with insider trading.
Volatility risk: Crypto-assets are subject to large prize fluctuations in both directions. The amplitude of such fluctuations is difficult to predict.
Liquidity risk: At any moment in time, there is the risk that a token-holder cannot sell or buy certain crypto-assets due to a limitation in liquidity. Indeed, some assets may not be available during a shorter or longer period. Similarly, there is no guarantee that a market for a crypto-asset be maintained at all times. It is even possible that certain crypto assets can no longer be sold or can only be sold at a significant discount.
Risks related to the private keys and cyber security: Theft, loss or hacking of private keys means the permanent loss of crypto-assets. Therefore, the NFT holder is well advised to keep their private keys in a safe location.
Regulatory risks: Any future regulation, whether Swiss or foreign, in the crypto-asset market can lead to a limitation of the possibility to hold and/or exchange crypto-assets which can have a significant impact on the prize and liquidity of crypto-assets. The extent and type of the future changes in the regulatory environment as well as the impact of additional regulations are unknown and difficult to predict.