Welcome to the new age of investing.
Millennials are coming of age. They finally have excess income and guess what – they are finally spending it! (Remember the outrage when they were apparently just spending it on avocado toast and not houses?)
The markets have been finding this out recently with the drama surrounding Gamestop stock and Dogecoin cryptocurrency among others: millennials are finding alternative ways to invest their cash.
It used to be low yield bonds and maybe if you were feeling particularly crazy, it was a stock. That’s not the case anymore. Millennials and even Gen Z like to (Austin Powers voice) “live dangerously.”
Since NBA Top Shot is a blend of crypto and traditional securities, you can see why early adopters have seen it as yet another alternative investment to add to their portfolio.
So when you are getting started with Top Shot you may ask yourself…
Is it actually an investment?
In short, yes. But what remains to be seen is if Top Shot will be a good investment down the road. Typically, an investment is something you can count on appreciating in 5, 10, 15, and maybe even 50 years.
We have seen a modern boom in sports trading cards. They’ve actually outperformed the S&P 500 over the last decade.
NBA Top Shot is both a technology and a collector’s item. Moments function just like any other sports memorabilia. But instead of being a signed jersey that hangs on your wall or a graded sports card dies inside a drawer, Moments from NBA Top Shot “live” on the blockchain.
We’re living in the digital age and Top Shot offers the first digital collectible of its kind. It’s attempting to mimick but still improve the trading card industry.
What else could moments be used for other than showing off?
Already, we are seeing companies like Nifted create digital frames that showcase your moments. They’re adding to the ecosystem and there is sure to be others that follow as time goes on.
Additionally, there’s a synergy between NBA Top Shot and daily fantasy. Fanduel and MomentRanks.com have both hinted at a future in daily fantasy challenges or head-to-head competitions that will provide further utility to users. Your moments will be used in order to start certain players. It’s a novel idea really, one that I’m particularly bullish on. It’s like Yugioh but with real athletes.
Ultimately, it’s a good sign when companies are building entirely new companies on top of yours!
What prevents Top Shot from being a good investment?
The sentiment with Top Shot users has been waning as of late. Falling prices because of increased inventory have left a bad taste in some users’ mouths.
For many, Top Shot became a fun way to make a few extra bucks. Few were looking at it as a long-term investment strategy.
As with any fad, people jumped on the bandwagon when moneymaking was easy. When it got tough, a lot of people realized they didn’t want to work for it.
Quite honestly though, that’s always been what sports memorabilia collecting has been. It’s a super niche and has eras of intense popularity followed by years of complete disinterest. That doesn’t mean it can’t be a good investment though.
It’s about time in the market, not timing the market. A good investment can be niche, but the mindset of the “collectors” in Top Shot is something to consider. Are they in it for the collecting because they love the NBA? Or are people just interested in NFTs?
Sportscard collecting has never been widespread or as popular as it may seem. It’s always been fanatics and then everyone else. While the NBA certainly grows in popularity both domestically and globally, there are no guarantees that NBA collectors will grow at the same rate.
That being said, I never thought I would see sneakers become as big of an industry as it became with StockX. Who is to say that Top Shot won’t do the same for collecting?
If the floodgates do ever open, Top Shot makes starting a collection easy and there are no physical storage or grading systems needed. A low barrier of entry is good for investors.
Can that hobby be a legitimate source of income? Signs and history tell us yes.
You can make money collecting moments right now even. As time goes on, you’d imagine more collectors will enter the ecosystem, players will get more popular, and suddenly a moment you own is rarer than it was. And society always likes to buy things that are rare.
So long as you take a realistic view on the upside of Top Shot collecting, then I can say confidently that it will be a good investment for any fan of the NBA.