23 October 2022
The sports industry is big business. Very big business. A recent report by The Business Research Company values the industry at a shade under half a trillion dollars in 2022. And this is despite the brakes that were applied to the industry by the Covid-19 pandemic for the best part of two years.
Add to that the expectation that this market will continue to grow at an annual rate of around 7% for the next few years. That growth, however, will come with some challenges. Participants in this industry have had to radically change their business models and adapt to new sources of revenue to keep afloat.
Let’s put this into perspective. In his 2020 MBA dissertation titled “The Importance of Fan Engagement and Fan Management in Sports”, Andrea Previati states that ticket sales yielded 90% of a sports franchise’s revenue. Nowadays, that is less than 20%. Revenues are now largely derived from broadcast rights and sponsorships.
He goes on to say, however, that fan engagement is emerging as an important new “lever for sports clubs to diversify the nature of revenues”. He believes that revenues will be more and more directly linked to fan engagement. The fan experience is becoming crucial to the financial future of clubs. Not only on game day but all the time. This is where blockchain sports cards are a game changer.
What are blockchain sports cards?
Blockchain was originally developed for cryptocurrency and as a payment mechanism that is not regulated by any governmental authority or hindered by international frontiers. It has, however, developed into something much, much bigger. One of the additional use cases is the non-fungible token (NFT).
This is a crypto coin that serves a special purpose. It contains additional data that makes it unique and it can be made to represent any tangible or intangible asset. In the sports industry, an NFT is the perfect sports card. The image and all the biographical data that was printed on the card, are now recorded in a block of data. And the security of the blockchain ensures its authenticity.
It goes further than that though. A token can also be a digital certificate of authenticity for a physical collectible. It goes further still; blockchain sports cards can be game-day or season tickets, invitations to special events, discount coupons or several other sports-related things. All it takes is a little extra coding to embed all of these incremental details.
When did they begin to emerge?
The concept of digital tokens was first introduced in 2012. Known as “colored coins”, the thinking was that certain Bitcoins could be enhanced with additional data to give them a special purpose. Over time this idea developed into what we know nowadays as NFTs. A non-fungible item is one that is unique and cannot be exchanged like-for-identical-like.
NFTs didn’t take off spectacularly in those early years. It was only in 2014 when a digital artist minted the first collectible NFT that the potential became evident. Over the next few years, several trading card games were created which started a groundswell of interest in NFT collectibles.
The floodgates opened in 2017 when OpenSea, the first NFT trading platform, was launched. Somewhat of a craze developed and several collections of tokenized memes appeared and started to fetch crazy prices. Sports entered the fray in 2019 when the NBA launched NBA Top Shot, an online exchange for basketball blockchain sports cards.
And the rest, as they say, is history.
Can you make money with NFT sports cards?
Trading in any type of asset attracts certain risks. In the world of sports collectibles, this holds true as much as it does in the stock market. Whilst the vast majority of sports collectibles will devalue over time, there is a small percentage that will appreciate. Several sports memorabilia have achieved prices running into the millions of dollars.
As an investment, blockchain sports cards have some distinct advantages over traditional trading cards. Firstly, they are digital and traded in online exchanges. Transactions can be concluded between parties located anywhere in the world. Secondly, an investor is assured of the authenticity of his purchase.
This makes NFTs a very attractive investment vehicle. But, can you make money? Yes, absolutely. With some research or insight, and with a small dose of good fortune, who knows? You may yet pick up the digital modern-day equivalent of a Michal Jordan NBA jersey or that specific 1952 Mickey Mantle baseball card.
Where to get one in 2022?
Since the first NFT exchange opened in 2017, there has been an avalanche of exchanges all over the world. There are currently an estimated 250 exchanges operating in the blockchain sports cards marketplace. Some of these are dedicated to specific types of NFTs such as NBA Top Shot and NFL All Day. Others are small and lack liquidity or have very limited portfolios.
As a potential investor, it would be advisable to deal only with the larger exchanges that have built a solid reputation and can offer good liquidity for quick results. Another factor to consider is the operating jurisdiction of the exchange, and whether there is any regulatory oversight or governance requirement.
If you’re a serious investor, looking for those high-end blockchain sports cards, you should opt for an exchange that offers over-the-counter (OTC) trading. This is where a buyer and seller transact directly with each other. The OTC broker typically finds parties with matching requirements and brings them together for a fee.
Singularifty is the perfect digital sports cards platform
While there are many established exchanges that receive good review scores, the one to look out for is Singularifty. This is the NFT trading division of the NextHash Group. Operating under European Union regulations, this is your safe bet in digital asset trading.
Singularifty operates on a blockchain and, as such, offers a safe and secure trading environment coupled with a multitude of payment options in both fiat and cryptocurrencies. For users that are new to the NFT space, the platform has step-by-step guides covering all aspects of NFT trading.
With a standard automated exchange and an OTC desk backed by the power of the NextHash Group, Singularifty caters to everyone in the blockchain sports cards industry. The future of fan engagement is here.