The Lowdown: NFT: Fad or Fortune

By Sean Chaffin and Randy Mastronicola

Who could forget excitedly tearing into a pack of baseball or football cards with friends? Would you find just the right card to complete a collection? Those looking to relive some nostalgia may want to forget searching out that Joe Montana rookie card. While the card biz has seen a revival, the industry’s now moving beyond cardstock.

NFTs are all the rage now and have seen sky-high auction prices in the hundreds of thousands recently. For the uninitiated, NFT stands for non-fungible token. What does that mean in regular Joe language? NFTs are digital memories or events–and they’ve blown up the sports card industry. Collectors purchase digital “packs” that can include one-of-a-kind digital moments from slam dunks to touchdowns. It’s like a sports card coming to life–a rare Mickey Mantle rookie card meets Back to the Future II.

Like cryptocurrencies, NFTs are stored on a blockchain and only the owner has access. These can be transferred, however, and many collectors are doing just that for big bucks. The NBA Top Shot NFTs are among the most popular. In February, a Lebron James dunk sold for $208,000. On the NFL side, a buyer purchased five exclusive Rob Gronkowski tokens in March for a total of $650,000.

Major card companies like Topps and Panini have gotten into the game. NFTs have driven a revival of the hobby and Topps is now planning an IPO thanks in large part to this resurgence. The stock offering is expected to be valued at north of $1 billion, a long way from a wax pack and stick of bubble gum.

Can the craze continue? The collectible world has seen plenty of hot commodities go south–from comic books to Cabbage Patch Kids. CNBC noted in June that sales overall (including non-sports offerings) peaked during one week in May at $176 million. That had declined to $8.7 million by the week of June 15. Industry observers believe that downward slump may in fact show market stabilization, but questions remain.
“The bigger question for NFTs is their long-term value, which we believe is likely significant,” Nadya Ivanova, chief operating officer of the market research firm L’Atelier BNP Paribas, told CNBC. “As augmented and virtual reality technology matures, normal people are going to spend more and more of their time–and therefore money–in virtual environments.”

Others disagree. Investing thousands of dollars in something so intangible just seems crazy to some. Can sports tokens defy downward trends in other NFT markets? That remains to be seen, but plenty of companies are throwing their hats in the token-minting game–from Marvel and DC comics to the World Poker Tour. It’s TBD if the cash wave continues or the tokens will ultimately be worth nickels and dimes. It’s going to be fun to watch for those on the outside looking in, and maybe a nail-biter for those with skin in the game. -S.C.

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By |2021-09-02T12:21:30-08:00September 2nd, 2021|Lifestyle, Tech|Comments Off on The Lowdown: NFT: Fad or Fortune
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