Up Over 125%, Here's Why Chiliz Is Smoking Hot This Month

Chiliz is scoring all the crypto goals this month.

Chiliz (CHZ) is on fire. The token that empowers sports fan engagement is up over 125% in the past 30 days. Chiliz has over 120 partnerships with various sporting teams, primarily soccer, but also other sports such as American football, hockey, tennis, and more. By buying team tokens, sports fans can access exclusive benefits such as meeting their heroes, attending VIP events, or getting signed merchandise.

Many cryptos are struggling to make much headway against adverse economic winds, but progress toward a major upgrade has put Chiliz on a winning streak. Top coins Bitcoin (BTC) and Ethereum (ETH) have gained around 4% and 22%, respectively, in the same period, according to CoinMarketCap data.

What's driving Chiliz' price surge?

The main reason for Chiliz' dramatic price gains is that the project is on the verge of moving to its own blockchain. After almost six months, Chiliz Chain 2.0 -- or CC2 -- is in its final stage of testnet development. The next step will be a move to the mainnet, dubbed the Habanero phase, which is what's got investors fired up.

The idea behind CC2 is to make the whole project more scalable and create more utility for the CHZ token. Chiliz was originally built on the Ethereum ecosystem, which struggles with high gas fees and network congestion. Moving to its own blockchain will mean Chiliz -- and its sports team partners -- can escape these restrictions.

"Ethereum transactions are fundamentally too expensive for the average web3 user and the current version of the Chiliz Blockchain is not optimized for web3 deployment," said a blog post. The new blockchain uses a proof-of-stake validation model, which will give the CHZ community more opportunities to benefit and play a role in Chiliz' evolution.

What it means for investors

Chiliz is a solid project that's been on our watchlists for some time. It's a crypto that has many real world partnerships and offers utility outside of the crypto world. Fan tokens are an interesting area -- they can help build community and give fans exclusive benefits. The move away from Ethereum could reduce gas costs and pave the way for more development.

However, Chiliz is not without its risks. For starters, it's always good to be wary of a crypto that's surged over 100% in a month. The crypto industry is rife with speculation and it's hard to know how sustainable the recent frenzy will be. Added to which, developing a new blockchain could open Chiliz to unexpected technical and security issues.

It is early days for fan tokens, and there's a lot for investors to research. For example, some sports enthusiasts have opposed the whole concept of fan tokens. Some worry about the risks of crypto, others object to having their passion monetized. In the U.K., one football team landed in hot water with the Advertising Standards Authority for promoting the sale of its tokens.

Bottom line

All cryptocurrencies carry risk and the whole industry has struggled for much of this year. Challenging economic conditions and uncertainty over increased regulation hang heavy over even solid crypto projects. Indeed, despite recent gains, Chiliz is still down over 70% on its all-time high. The market may recover and go on to reach new highs, as it has done before. However, there are no guarantees.

If you're considering buying Chiliz, make sure you're on top of your other financial goals -- such as your emergency fund and retirement contributions. Only use money you can afford to lose to buy crypto. That way you'll be positioned to benefit if it does generate extraordinary returns, but you won't face financial ruin if things go sideways.