In May 2021, four men met a man as he left a place of business in a Wisconsin suburb. A fight broke out, and the victim pulled out a gun. Even though no shots were fired, shoppers had to leave and businesses in the area were closed for hours. The fight wasn’t about jewelry, money, or even a personal disagreement. Instead, it was about sports cards, which have become popular again because of the pandemic.
Target had a lot of trouble with customers trying to get trading cards before the parking lot attack. Like people who shop on Black Friday, card collectors camped out overnight in front of stores in hopes of getting a pack of cards that could be worth thousands of dollars. At first, Target told customers not to wait in line overnight. When this didn’t have the effect they wanted, the store stopped selling trading cards in-store. These included baseball cards, Pokémon cards, and cards from other sports.“The safety of our guests and our team is our top priority,” the chain said in a statement.
The trading card business did well in the economy, which was a surprise. eBay has sold more than 4 million cards in the US, which is 142% more than it sold in the US in 2019. As of February 2020, 12 tickets have been sold for more than $1 million. In January 2021, a Topps Mickey Mantle Rookie card sold for $5.2 million. It’s great for the business, which has grown quickly since 2019. Last year, ESPN said that the sports card market was like a gold rush because of how crazy it was and how the prices kept going up.
In this setting, new things like digital maps or sports NFTs come out. In 2020, Dapper Labs and the NBA worked together to make trading cards available online. NBA Top Shot is an NFT marketplace where sports fans can buy, sell, and trade video highlights from NBA games that have been made into NFTs. These video highlights are called “Moments” on NBA Top Shot. The hope is that videos will become the new trading cards for tech-savvy collectors with lots of money. This way, collectors won’t just be able to hold a card with a picture of a person on it, but also a clip of a memorable sports moment.
Think of it like a highlight reel that you can collect on the blockchain. In February 2020, LeBron James dunked during a game against the Houston Rockets. In April 2021, a clip of that moment was sold at auction for $387,600.
“We have something the hobby never had before,” Ken Goldin, founder of Goldin Auctions, said in an interview with Bloomberg. “Suddenly we’re cool.”
Card collecting has become more popular in recent years because of the flu, the sentimental value of an old hobby, and the hobby’s growth into digital collectibles. Card collectors don’t just see it as a hobby; they also see it as an alternative to the stock market where they can make money by investing. But trading card markets are volatile, just like any other market. Right now, prices are going down because of the record sales during the pandemic.
Geoff Wilson began collecting cards when he was young, like a lot of kids did in the 1980s. After not doing it for more than 30 years, he started again in 2018 when his son bought a pack of football tickets at Target.
“We looked at them together and opened a few packs together. This is the first time I’ve seen cards in many years,” Wilson said. “I immediately got a little nostalgic and got interested again.”Wilson can buy the cards that would make his younger self jealous now that he is an adult with money to spend. When the pandemic hit two years later, people who had been collecting for a while found their old map collections in closets and basements and got back into this hobby.
“It’s almost like a form of gambling in a weird way,” said David Hunt, president of Hunt Auctions, an auction house specializing in sports memorabilia.
For card collectors, the hope of finding a rare card in a pack that hasn’t been opened has kept them buying for generations. Since more and more collectors are looking at trading cards as an alternative investment, the possibility of making money from the hobby makes it even more interesting and fun.
The “PWCC 100” index was made by PWCC Marketplace, which calls itself the largest trading card market in the world. It tracks the value of sports facilities from 1999 and before and compares it to the S&P 500. PWCC says that over the past seven years, these investments have done much better than the S&P 500. For long-time collectors like Wilson, investing in your favorite players and having cards neatly packed in physical sleeves that you can touch and play with is more real than seeing the numbers in your stock account change.
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Wilson and other map collectors even started making content for different platforms so they could connect with other collectors and share their knowledge. He made a website called Sports Card Investor that has a weekly show about the latest trends in the sports card business.A podcast called “Sports Card Nonsense” talks about how current sports events affect the value of cards and looks at each card like a stock. Buying stocks is a lot like collecting cards in a lot of ways. By buying a player’s rookie card, a collector is betting on the player’s future and rooting for them to make it to the Hall of Fame one day. It’s not necessarily easier than buying stock in a company that just went public and picking a winner.
The NBA Top Shot NFTs video highlights are very similar to the physical cards. Depending on how rare the virtual cards inside are, “packs” can cost anywhere from $9 to $999. Then, collectors can trade moments in the hopes that flipping the virtual cards will lead to big wins. Wilson wanted to see what would happen after NBA Top Shot came out, so he went shopping for some big-name players like LeBron James, Zion Williamson, and Luca Dončić.“I think it’s a risky, speculative style of investing,” Wilson said, “but I figured it was worth putting some money in to see what happens.”
The best parts of the videos used for NBA Top Shot Jack Settleman, a 24-year-old business owner, was more positive about this new venture than Wilson. In a March 2021 YouTube video, he showed off his $2 million worth of NBA top shots.“My friends and I bought a moment from LeBron James for $47,500 … and the goal is to sell it to LeBron for $1 million,” Settleman said in the video. Not only basketball fans bought and sold Top Shot Moments, but also basketball pros. It was a big goal, but James Highlights had been successful before, so it wasn’t impossible.
But things are getting better quickly. In July 2022, NBA Top Shot made $8.3 million, which was 82.5% less than a year before.“I think what you’re seeing with the price declines and the huge changes in the market isn’t just an economic one,” Hunt said.No matter if it’s an NBA highlight or a digital painting, the NFT world is used to sales that break records.
“It’s like any collectible, it’s like any art … you can’t build a market at this level in two years,” Hunt added. “It’s not happening.”Settleman didn’t get to sell for a million dollars, which was his dream. LeBron hasn’t paid $1 million for a video highlight of himself yet; the highest bid so far is $2,300. Wilson still has his collection, and he hopes to get it back one day. Investors are looking at the NFT market from a long-term perspective as it grows and becomes more popular.
Starting in 2022, the prices of old, high-quality sports cards are also coming back down to earth. Card Ladder’s CL50 index, which tracks the value of 50 hand-picked cards that best represent the card market, has dropped by almost 50% since its peak in 2021. This is because more cards have been burned since then.
Even though both the physical card market and the digital card market are changing, people still love sports cards and sports in general. “If you compare the sport’s popularity to other antiques and art and fine wine and things that have always been an asset class, the sport is probably ten times more popular than all of them combined,” Hunt said.Collectors can find meaning in sports cards, whether they are a reminder of their childhood for nostalgic millennials or a way for crazy fans to connect with their favorite athletes or a way to make money.
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