Francis Scialabba
· 7 min read
In May 2021, four men confronted one man as he left a Target in suburban Wisconsin. A fight ensued and the victim pulled out a gun. Although no shots were fired, shoppers were evacuated and nearby stores were closed for hours. The fight wasn’t over jewelry or cash or even a personal beef: It was over sports cards, which have become coveted items due to a pandemic resurgence.
The parking lot attack was the culmination of problems Target experienced from customers looking to snag trading cards. Like Black Friday shoppers, passionate card collectors started to camp out overnight in front of the stores, hoping to snag a pack of cards potentially worth thousands of dollars. Target first asked customers not to line up overnight. When that didn’t have the desired effect, the store suspended in-store sales of trading cards, which covered everything from baseball to Pokémon cards. “The safety of our guests and our team is our top priority,” the chain said in a statement.
The trading card industry was an unexpected stay-at-home economy winner. eBay sold more than 4 million cards in the US, marking a 142% increase in domestic sales in 2020 compared to 2019. Since February 2020, over a dozen cards have been sold for over $1 million. A Topps Mickey Mantle rookie card was sold for $5.2 million in January 2021. It’s a boon for the industry, which has seen major growth since 2019. Last year, ESPN described the sports card market, with its frenzy and increasingly high prices, as a gold rush moment.
Into that landscape, digital cards, or sports NFTs, make their debut. In 2020, Dapper Labs, in a joint venture with the NBA, brought trading cards into the digital space. NBA Top Shot is an NFT marketplace where sports fans can buy, sell, and trade “Moments” (Top Shot lingo for video highlights) of NBA games minted as NFTs. The hope is that videos will become the new trading cards for tech-savvy collectors with money to burn, allowing collectors to hold not just a card that depicts an individual, but a clip that captures a memorable sports moment.
Think of it as a collectible highlight reel on the blockchain. A moment of LeBron James dunking in a game against the Houston Rockets in February 2020 was auctioned for $387,600 in April 2021.
“We have something the hobby has never had before,” Ken Goldin, the founder of Goldin Auctions said in an interview with Bloomberg. “All of a sudden, we’re cool.”
The pandemic, sentimental attachment to an old hobby, and the hobby’s expansion into the realm of digital collectibles worked together to fuel the recent interest in card collecting. Collectors see card collecting not just as a hobby, but as an investing alternative to the stock market where they can build wealth. But, like any market, trading card markets are volatile and are currently going through price corrections after record sales during the pandemic.
Like a lot of ’80s kids, Geoff Wilson started collecting cards when he was young. After abandoning the hobby for more than three decades, he picked it up again after his son bought a pack of football cards at Target in 2018.
“We looked at them together and opened some packs together. This is the first time I’d seen cards in quite a number of years,” Wilson said. “I instantly became a little bit nostalgic and interested in it again.” Now, as an adult with expendable income, Wilson can buy the cards that would make his childhood-self jealous. Fast forward two years, when the pandemic hit: Veteran collectors found their old card collections stuffed in closets and basements, and rediscovered this hobby.
“It’s almost like a form of gambling in an odd way,” David Hunt, president of Hunt Auctions, an auction house specializing in sports memorabilia, said. For card collectors the chase mentality involved in looking for a rare card in an unopened pack keeps generations of collectors buying. With more collectors seeing trading cards as an alternative asset now, the potential financial gain makes the hobby even more appealing and exciting.
PWCC marketplace, which bills itself as the largest trading card marketplace in the world, created the “PWCC 100” Index to track the value of sports assets from 1999 and earlier against the S&P 500. PWCC claims that such assets have significantly outperformed the S&P 500 over the past seven years. For longtime collectors like Wilson, investing in his favorite players and having cards nicely packed in physical sleeves, which he can touch and play with, is more real than seeing the numbers change in his stock account.
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Wilson and other fellow card enthusiasts even started to create content on different platforms to bond with fellow collectors and share their expertise. He built a website with a weekly show called Sports Card Investor to discuss the latest trends in the sports card industry. A podcast called Sports Card Nonsense zooms in on how current sports events are affecting cards’ values and analyzes individual cards like stocks. Collecting cards is comparable to buying stocks in many ways. By buying a rookie card, collectors are investing in the future of that player and rooting for him to ascend to the Hall of Fame someday. It’s not necessarily easier than buying stocks of a company that just hit an IPO and picking a winner.
The video highlights used for NBA Top Shot NFTs have a lot in common with the physical cards. “Packs” are priced from $9 to $999, based on the rarity of the virtual cards in them. Then collectors can trade Moments, hoping to flip the virtual cards for enormous profits. After NBA Top Shot debuted, Wilson decided to test the waters out of curiosity: He bought in several of the big name players, including LeBron James, Zion Williamson, and Luca Dončić. “I consider it to be a risky, speculative style of investment,” Wilson said, “but I figured that it was worth putting some money in to see what happens.”
Unlike Wilson, Jack Settleman, a 24-year-old entrepreneur, was more bullish on this new project. In a YouTube video published in March 2021, he showed off his $2 million NBA Top Shot collection. “My friends and I bought in a Moment of LeBron James for $47,500.…And the goal is to sell it to LeBron for a million dollars,” Settleman said in the video. Not only fans, professional basketball players were buying and selling Top Shot Moments as well. It was an ambitious goal, but given the track record of James highlights, it wasn’t unachievable.
But the tide turns fast. NBA Top Shot sales dived to $8.3 million in July 2022, a 82.5% fall from its sales one year before. “I think that what you’re seeing with the price decreases, and the vast changes in the marketplace are not just economically explained,” Hunt said. The NFT world is familiar with record-setting sales, whether it’s an NBA highlight or a digital painting.
“It’s like any collectibles, it’s like any arts…you cannot establish a market at that level in two years,” Hunt added. “It doesn’t happen.” Settleman hasn’t accomplished his sell-for-one-million dream. LeBron hasn’t paid $1 million for his own video highlight so far—the highest offer for the Moment is $2,300. Wilson still holds his collection, hoping for a rebound in the future. Investors are taking a long-term look at the NFT market as it continues to evolve and achieve greater adoption.
Stepping into 2022, the prices of high-end, antique sports cards are returning to Earth as well. CL50, an index created by Card Ladder that tracks the value of 50 hand-selected cards that best represent the card market, fell by almost 50% from its peak in 2021. But Wilson is optimistic about his cardboard investment, saying “that value has been baked into the cards” in the century long history of trading cards.
While both the physical and digital cards markets are shifting, the enthusiasm for sports cards and sports in general is not going away. “If you compare the popularity of sports to other antiquities and arts and fine wines and things that have always been quote investment class, sports is probably more popular than all of them combined by tenfold,” Hunt said. Whether it’s a childhood memory for nostalgic millennials, a connection between feverish fans and their favorite athletes, or a tool to build wealth, collectors can find some kind of meaning in the sports cards.
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