Jessie Raymundo was already a huge basketball fan. But now, he’s found another outlet for his hoops obsession.
Raymundo spent most of last weekend at his house in Melissa, Texas, about 40 miles north of Dallas, buying and selling digital basketball cards on something called NBA Top Shot. His wife, Dalila Payan, didn’t really get it at first.
“You know it didn’t make sense to me because,” Payan said. “How could it make sense if it’s not a physical card?”
The whole thing made even less sense when she learned how much Raymundo spent on those cards – more than $20,000 in that one weekend.
It’s a lot of money. But according to Raymundo, it’s been well worth it so far.
“If I were to cash out right now, my return on investment’s like, five grand,” Raymundo said.
Success stories like this are common in Top Shot circles, which is one of the reasons it’s grown so quickly.
The cards themselves – or moments, as they’re technically called – are slick web pages, with an animated highlight of, for example, LeBron James dunking, or Kevin Durant shooting a three.
The NBA partnered with a blockchain company called Dapper Labs to create the moments, and the online marketplace where they’re bought and sold.
Collectors can buy packs directly from the NBA too, athough high demand has often made this difficult.
Even though you can’t touch them, there are some advantages to collecting digital cards.
“It’s not going to get lost, it’s not going to get damaged, your kid isn’t going to pull it out of the binder and destroy it,” said Mike Provenzale, operations supervisor for the sports department of Heritage Auctions in Dallas.
Top Shot is powered by blockchain technology, which means that all the transactions are public. At any time, you can see who bought what from who, and how much they paid for it.
Some moments are worth more than others. Value depends on the player and the scarcity of the moment. Stars tend to be worth more than bench players. A game-winning three-pointer might sell for more than a layup. But right now there’s high demand for pretty much everything on the market.
“This has just been an explosion, essentially,” said Provenzale.
So far, Top Shot has sold more than $230 million worth of moments. $50 million of that came in just the past month.
Provenzale has fielded a lot of questions about Top Shot lately — mainly, how much are these moments worth.
One collector asked about a Zion Williamson moment – he’s a young star from New Orleans who’s one of the most sought-after players on the market.
“I was talking to him on Friday, I said it’s worth about a thousand dollars. And on Monday he emailed me and said ‘I sold it on the marketplace for seventy thousand,’” Provenzale said.
On Sunday, Heritage Auctions sold another Zion Williamson moment for $162,000 on Sunday.
Top Shot is not a perfect money-printing machine though. The web site still has problems handling demand. Some users haven’t been able to withdraw their money.
There’s also the question of whether digital trading cards will have any value in the long run, or if they’re just – having a moment, so to speak.
“At first glance, it seems crazy that people would pay huge amounts of money for little digital bits that reside on their phone,” said Victor Matheson, a professor at the College of the Holy Cross who specializes in sports economics.
Right now, it’s not clear how many people want to collect Top Shot moments, versus how many want to flip them for profit.
If the market consists mostly of flippers, Matheson says it will eventually crash.
So, the big question is whether there’s a real market for Top Shot moments, or is it a bunch of flippers trading cards back and forth?
Matheson thinks that even if the current sky-high prices eventually come down, the moments could still be worth a lot down the road. Other collectibles with no inherent value – Beanie Babies, Hummel figurines, Precious Moments merchandise – are still sought after by some.
But the difference between Top Shot and those other collectibles is that they don’t have the backing of an institution as powerful as the NBA. Many of the league’s movers and shakers – foremost among them, Dallas Mavericks owner Mark Cuban – are throwing their weight behind the platform.
And if the NBA’s success with Top Shot is an indicator of what’s to come, Matheson says other leagues are sure to follow.
“I would be shocked if we don’t see the same product being put out by Major League Baseball within months, the same product put out by the NFL,” Matheson said. “So there’s no reason to believe that this isn’t going to explode everywhere.“
