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HomesuccessThe sports trading card boom: Baseball cards selling for millions and the...

The sports trading card boom: Baseball cards selling for millions and the crypto craze hits NBA Top Shot

Dallas Mavericks star Luka Doncic set a record on Feb. 28. But it wasn't for his moves on the court. Instead, his autographed NBA rookie trading card sold for $4.6 million, making it the most expensive basketball card ever sold.

Just a month prior, a 1952 Mickey Mantle card became the highest selling sports card ever at $5.2 million. Then, in April, iconic sports card brand Topps announced it was going public through a merger with special acquisition company (SPAC) Mudrick Capital Acquisition Corporation II, in a deal valuing Topps at $1.3 billion.

And it's not just physical cards. In February, a highlight clip known as a "moment" showing a LeBron James dunk sold for more than $200,000 via NBA Top Shot. The blockchain-based, online platform saw more than $150 million in sales of NFT highlight clips during the final week of February alone.

Sports trading cards are suddenly booming, with returns on sports card investments even outperforming the S&P 500

The majority of the approximately $5 billion sports card trading market has been cards sold in eBay auctions. But now, a new wave of online start-ups and blockchain-based digital collectibles could change the way enthusiasts and investors collect and sell sports trading cards forever.

Cards go digital

The sports card trading boom has officially extended to the virtual world.

There is a furor around digital collectibles like those sold by Panini America and platforms like Dapper Labs' NBA Top Shot, where users buy and sell short video highlight clips, called "moments," featuring NBA players. Vancouver-based Dapper Labs has raised more than $357 million in funding from investors such as private equity firm Coatue Management, current NBA players like Kevin Durant and Andre Iguodala, and even NBA legend Michael Jordan.

Digital trading cards have been around for several years on mobile apps, but blockchain technology has changed the game, allowing platforms to actually track ownership of digital assets, like NFTs. (NFTs, or non-fungible tokens, can take the form of anything from a sports collectible to so-called "crypto art." A viral animation of a flying cat recently sold for $580,000.)

Even though the moments for sale on NBA Top Shot feature video clips that can be found online for free, collectors are still lining up to shell out hundreds, even thousands, of dollars for the bragging rights to officially own a unique or limited run moment that's been licensed by Dapper Labs and the platform's partners, the NBA itself and the league's players association.

On Feb. 26, for instance, more than 200,000 collectors waited in an online queue for the chance to buy one of just over 10,600 new virtual packs of those NBA Top Shot moments in Dapper Labs' latest release event (each pack, which cost $99, contained six moments total).

Count Mark Cuban among the investors obsessed with NFTs, as the billionaire owns moments featuring dunks of his own Dallas Mavericks players and he recently said he'd focus on blockchain and NFTs if he were to start a new business today.

Caty Tedman, one of the creators of NBA Top Shot and the head of marketing and team partnerships for Dapper Labs, tells CNBC Make It that it's been "exhilarating" keeping up with the demand the platform has already seen. 

"What do basketball fans love?… It's the spectacular play that happens on the court every night," says Tedman.

Dapper Labs also built off the key features of physical trading cards and added digital elements like video highlights, animations and a wider array of player statistics.

"The amount of stuff that we can cram into a collectible is a lot more than you could have on a physical [card]," Tedman says.

The Vancouver-based company is now reportedly valued at $2 billion, and more than $280 million has been spent on the NBA Top Shot platform since it launched online in October, according to data tracker CryptoSlam.

Not surprisingly, there are plenty of skeptics who believe the high prices and massive demand for Top Shot moments are bound to fall back to earth. Even Cuban believes that "pricing will settle down" for NFTs like Top Shot moments over time, but he's adamant that the interest in the blockchain technology behind them is legitimate and not going anywhere.

And Tedman notes that Top Shot's success has been driven by more than just six-figure sales, as the platform has performed more than "half a million transactions in the $9 range."

Whatever happens, the platform's emergence comes as the overall market for sports cards has seen a major resurgence in recent years.

"I think the trading card boom certainly kind of kicked it off," Dapper Labs' Tedman says of the current interest in digital sports collectibles.

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