So far, 2021 seems to have been the year for Non-fungible tokens, also known as NFTs.
A few months ago, I was fully aware of cryptocurrencies like Bitcoin and Ethereum but I’d never even heard of an NFT and had no idea that blockchain collectibles were a thing… and now I’m hearing of NFTs selling for 10’s of millions of dollars in some cases.
Back in February, popular sports card investor, Gary Vaynerchuk, bought an NFT soccer card (a 1/1 unique Joao Felix token) on the Sorare platform for around $22,500.
Around the same time as that, a Lebron James Slam Dunk NFT card sold for $208,000 on the NBA Top Shot platform.
Topps, one of the most well known card manufacturers, have also been accelerating the digital side of their business by entering the NFT space recently as well as Panini, who’ve launched their blockchain store – this all got me thinking, are sports card NFTs the future of the trading card hobby?
What Is An NFT Trading Card?
You might be wondering what an NFT sports card is. NFT stands for Non-fungible token… but what does that actually mean?
Well, a fungible asset is one that can be interchanged, so take the US Dollar for example – If I exchange a $1 bill for another $1 bill, nothing really changes. A non-fungible asset cannot be interchanged with another, because no two are exactly the same.
An NFT is essentially a one-of-a-kind blockchain digital asset that, due to its unique properties and data, cannot be interchanged… so think of an NFT sports card as a unique, digital collectible sports card.
Are NFT Sports Cards Going To Be A Big Thing?
At first, I was confused as to why someone would pay so much for something they’ll never physically hold – why would you buy something that another person could take a screenshot of… but there’s obviously a market for it and once I started doing some research I could begin to see why.
They’re A Form Of Digital Art
For some sports card collectors, the joy and passion comes in physically collecting and holding those cards they’ve always wanted in their hands… it could be the nostalgia it gives them from collecting as a kid for example – digital trading cards will never be able to fully replace the hobby in its current form for those people.
But for other collectors, owning certain cards is a status symbol… being able to say they own 1 of only 63 PSA 10 Kobe Bryant 1996 Topps Chrome Refractor #138 cards, for example, is what drives them to spend crazy amounts of money on those types of cards – although i’m not saying that’s always the case. It’s not about owning the physical card itself, it’s about saying they can, and they do, own it.
A blockchain digital asset can serve the same purpose for those collectors, but rather than have a tangible card, they have it in the form of an NFT. Yes, people can screenshot and copy it or whatever, but when you purchase an NFT, like a 1 of 1 Kylian Mbappe card, you gain the unerasable ownership record within a blockchain as well as access to use the digital asset and make money with it on platforms like Sorare. It’s like a piece of artwork, anyone can own a copy, but only one person can own the original.
NFT Sports Card Collecting Can Be Combined With Fantasy Sport Style Games
There’s already a market for NFT sports cards. I’ve already mentioned the NBA Top Shot and Sorare platforms – there’s already collectors spending huge amounts of money on digital cards.
The aspect that makes it super exciting, in my opinion, is the idea of combining sports card collecting with fantasy league style games.
I’ve already published a separate article about what Sorare is and how it works – but, in short, it’s a soccer (or football, depending on where you’re from) NFT platform that allows you to buy and collect unique soccer player cards and use them to potentially win thousands of dollars in a fantasy soccer league style game… player performance in real life soccer has an impact on the value of the NFT.
It’s similar to games like Fifa Ultimate Team, which sells hundreds of millions of dollars worth of packs containing digital player cards that players can then play with in-game. There’s already a huge market for something like this – the difference is, NFTs won’t expire every year, unlike with Fifa, when a new version of the game comes out for the new season.
I think there’s huge potential for this to really catch on and expand into other sports – it adds a really fun new link between trading cards and watching real life games.
There’s Lots Of Similarities To Physical Card Collecting
As digital assets and collectibles, like art, become bigger and more popular, so will digital sports card collecting, in my opinion.
There are definitely similarities to the tangible card collecting hobby as well – whether that’s as an investor for profit or as a collector who does it out of passion for the sport.
There’s a chance for people to invest in NFT sports cards and sell to make a profit, if they know what they’re doing. It’s a supply and demand orientated market, just like with physical trading card markets. We’ve already seen NFT cards sell for huge money, and the principles of picking the next big star of a sport who’s card could skyrocket in value, for example, are still there – despite it being a digital card, it’s like any other speculative asset.
People who collect cards that have meaning to them (maybe they play for their favourite team etc) can still do that with digital cards as well – as I mentioned earlier, when you buy an NFT, ownership of that token is traced back to you on the blockchain.
Are Digital Sports Cards Worth Money?
Collectors and traders are already spending thousands of dollars on digital sports cards.
I’ve already included some recent examples above – the Lebron James Slam Dunk NFT card recently selling for $208,000 being the main one.
I’ve also already mentioned Electronic Arts ultimate team mode on their sport titles – EA’s net revenue across their different sport games’ ultimate team modes was just below $1.5bn in 2020 alone (a number which seems to rise every year). This revenue is essentially from players and collectors buying digital packs containing digital player cards… there’s a huge appetite for this kind of thing – I think certain NFT sports cards could be worth huge amounts of money in the years to come.
I think the rise of NFTs are inevitable. I’m not saying it’s going to be only an upward trajectory for all NFTs – Some of the prices we’re seeing being paid for digital assets now are crazy, and I wouldn’t be surprised if there was a bit of a crash at some point on a lot of them once the initial hype cools down.
For me, it will never fully replace the sports card hobby, as we know it now, because owning actual physical cards is what appeals to a lot of people – However, I think there’s big potential for digital sports card collecting and I can see it becoming a lot bigger in the future, especially when combined with the fantasy league element like with Sorare.