NFTs aren’t the only collectible market that’s on fire right now. One class of physical assets has been thriving since early 2020: sports cards.
The recent boom is often credited to the early days of the pandemic and 3 key factors:
- No sports to watch
- Extra cash from government stimulus checks
- Low interest rates, limiting the appeal of other investments
23 of the 24 biggest transactions in sports card history…
- August 2020: Mike Trout draft prospect card sold for $3.9m
- April 2021: Tom Brady rookie card sold for $2.3m
- April 2021: LeBron James rookie card sold for $5.2m
Part of the reason is systematic — in the ‘80s and ‘90s, the market cratered when card printers like Topps and Upper Deck flooded supply. Most cards printed between 1986 and 1992 are generally considered worthless.
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Entrepreneurs are finding a variety of ways to play the market
Innovative businesses in the space include:
- Box-breaking: Vortex Sportcards purchases sealed-off boxes of cards, then charges customers to reserve a pack inside the box for a flat fee.
- Asset management: Josh Luber, co-founder of StockX, recently founded Six Forks Kids Club, an alternative asset management company focused on cards.
- Fractional trading: Collectable buys cards and converts them into tradable assets, allowing users to purchase shares of cards.
- Authentication & grading: Collectors Universe, acquired in December 2020 for $700m, is a 3rd-party collectible authentication and grading service.
If these strategies seem excessive, there’s always the old-fashioned way to capitalize in the sports card market: selling cards for more than you bought them for.