How Alvarez-Arsenal Transfer Uncertainty Sent $ATM Volume Up 600%

The back-and-forth Julián Alvarez transfer saga ended not with a bang, but with a whimper, as a summer of speculation came to an anti-climactic end after the player ended up staying at Atlético Madrid.

One area where there was no lack of action, however, was in the Atlético Madrid Fan Token® ($ATM) markets, where trade volume increased by 600% as the daily handover jumped from $2.15M to over $15M in 48 hours.

The transfer saga lit a fire under $ATM traders, sparking a trading frenzy that lasted right up until after the final whistle blew on deadline day.

Let’s examine how $ATM traders reacted to the will-he-won’t-he nature of the Julián Alvarez transfer saga, and how it became the highest-traded Fan Token® on transfer deadline-day precisely because of the uncertainty in which the transfer was shrouded.

Alvarez-Arsenal Rumours Trigger 23.8% $ATM Price Drop

The first trigger for what eventually became a 600% jump in trade volume was a price drop. Early on the morning of August 31, the valuation of the Atlético Madrid Fan Token® ($ATM) dropped 23.8%, from $1.30 to $0.99. By this point, trade volume had risen from $2.15M to $4M.

The token recovered to a valuation of $1.27 within two hours (+28%), but trading continued to accelerate. By late on deadline day, rolling volume had reached $15.03M, nearly seven times its level at the start of the period in question.

Fan Token market reporter Ronnie McCluskey linked the price drop to the apparent likelihood of Alvarez leaving Atlético Madrid to join the Gunners.

As noted by our reporter at the time, Alvarez has made it publicly known that he wants a move away from Atlético, and Arsenal appeared to be the most likely destination given the Atlético hierarchy’s reluctance to let him join league rivals Barcelona, the player’s preferred destination.

The price drop appeared to be a sign that $ATM traders had decided the striker was leaving the club, viewing his departure at such a late date as a major blow to the strength of its first-eleven, and the club’s prospects for the season.

Ultimately, Atlético’s board publicly ruled out negotiations with Barcelona, and the English transfer window closed without Alvarez joining Arsenal. He subsequently agreed to remain with Atlético beyond the deadline, but speculation has already begun regarding a move away from the club in January.

Traders Banked on Uncertainty, Not Outcome

What’s notable about the surge in $ATM volume is that it already began to peak and then slowly tail off almost exactly as the English transfer window closed, without being accompanied by any large price change.

The slow reduction in trade volume accompanied by a relative lack of price movement suggests traders weren’t necessarily banking on the outcome of Alvarez’ transfer, but rather, had been looking to take advantage of the uncertainty surrounding it.

Trade volume measures the total value of tokens changing hands. It does not distinguish between bullish buying and holders selling their positions.

The price action that accompanied $ATM’s surge in volume points to a two-sided market, exemplified by how $ATM crashed, recovered quickly and then traded within a narrower range while volume continued to rise.

In the two days since the transfer window slammed shut, the $ATM token price has dropped 23%, immediately regained 28%, and now continues to trade sideways. Julián Alvarez remains at Atlético Madrid.

In the grand scheme of things, despite over $15M worth of $ATM changing hands, not much has actually changed.

Greg Thomson: Fan Token® Market Reporter