NBA Top Shot
Updated: Mar 23, 2021
If you’ve been watching the news, scrolling through social media, or simply paying attention to the world around you; I’m sure you’ve been hearing all the noise about investing. The Stock Market, Crypto, Bitcoin, etc. It’s a hot topic right now, & it can be very complicated for people who are new to the idea. Like any investment, it's important to learn about the stock market & crypto before you start. Sports memorabilia has proven to be a great investment.
Sports memorabilia has become a multi-billion dollar industry. Sports collectibles such as but not limited to game worn uniforms or equipment used in games, trophies, autographs, photographs, & of course sports trading cards, are valuable for collectors. If you don’t believe me, a 1952 Mickey Mantle baseball card sold for $5.2 million dollars about a month ago, setting the record for a sports card sale. Not every collectible will be worth $5 million, but you can buy low & sell high as father time and the halting of production on these collectibles help increase their value throughout the years. Also, getting an autograph or anything game worn from an elite athlete is valuable off rip. For decades, sports fans have tried to collect these and sell them later on in life at a premium. It's going digital now, & Top Shot doubles up as sports memorabilia & crypto, & a way for retail investors to profit.
NBA Top Shot
NBA Top Shot has been around since July of 2019, but recently went viral in the past 2 weeks. Up until 2 weeks ago, there had been around $50 million in transactions on Top Shot, & there’s now been around $78.5 million dollars in transactions. That’s about a 50% increase in transactions in 2 weeks. This is the newest trend in the NBA, as players are even talking about it throughout social media. People are saying this could potentially be the NBA’s version of Bitcoin based on the blockchain technology which is used by both systems.
What is it?
NBA Top Shot lets fans or anybody own digital highlight cards. As of right now, people are buying NBA highlights that are released by Top Shot in varying amounts with the hopes that they will be valuable. The packs they release are selling out in seconds now that it became so popular, but if you get one you can sell it to people who missed the release & want it. Since it’s sold out, you can sell it for a higher price than you got it. The best way to explain this would be comparing it to sneaker releases & resellers, but it’s the NBA releasing their highlights. Some people won’t be doing it to resell but instead to collect them. It’s a hot commodity right now so even just having them later in life could pay off, similar to how sports cards have cashed big checks for a ton of people.
You may be wondering why these highlights are all of a sudden so valuable when it seemed like nobody cared for owning them up until recently. With things like this, the market controls the value, so if people want them and are willing to pay a certain price, then it's worth that price. I don't think many people thought that sports cards would be this expensive now either. Like I mentioned before, the most expensive sale for a sports card is $5.2 million. So far, the highest valued NBA Top Shot highlight is a block by Zion Williamson from January of 2020 which is valued at $250,000 right now. Who knows how high the prices will be years from now if this trend continues.
Pros & Cons
There has always been disadvantages with the sports trading cards system. First, you don't always know exactly how many of each card are in the world, so the perceived values could be off if someone pops up with a new 5 copies of a card that everyone thought there was only 20 of. The Top Shots are on a blockchain network in which all transactions are published on a public ledger. It's a complicated technology, but just understand that we all have the ability to track the transaction histories of every copy of every highlight, so we know exactly how many are in the market. Second, people always need to get the card verified by a third party company so that the buyer knows it's legit. This comes with a fee & it's possible that you end up having a card that isn't authentic which essentially means it has no value. The only highlights available on the market are all verified already, as it's released directly by Top Shot which is in a business agreement with the NBA. Third, you have to ship the card and the buyer has to hope it actually ever comes. It's possible to get scammed when trading amongst randoms on the internet. With Top Shot, you don't have to ship anything since it's a 100% digital collectible. The transactions are put on the public ledger to verify that everyone got what they wanted from the deal.
There's some cons as well. Similar to sports cards, if you're buying them as an investment there is risk involved because the value of the highlights can potentially be volatile and lose value. If you're just collecting them, then you don't have to worry about that. Another downside is that you don't ever receive anything in the physical form so it isn't tangible. You own it but you never actually possess it yourself & the NBA still owns the intellectual property rights of the highlight itself. You only own the limited highlight cards which are released on NBA Top Shot. Also, because you don't actually possess it physically, it is always a possibility that you can be hacked despite precautionary actions taken to prevent that. Not saying it's gonna happen a lot, but it wouldn't be wise to assume it could never happen. The blockchain network is a very secure technology in general, so it will probably be very rare & unlikely.
Technology innovates every year and there's always new ideas and new technologies, NBA Top Shot is an innovation to the sports memorabilia business & even though it's still early; the cards are in it's favor. The NBA can do this with classic games, plays made by Hall of Famers, speeches or interviews, bench celebrations, heated moments, players walking into the arena. Will it ever be as big of a market as sports trading cards? That depends on if the other major leagues join the party. Either way, this is a really fun and interactive new way for fans to get involved with the NBA & sports memorabilia in general.