Associated risks

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.