Why NBA Top Shot is having a moment

Would you pay $208,000 US for a LeBron James highlight? Someone did. Here's your guide to understanding the latest (and maybe greatest) sports collectibles craze.

The latest (and greatest?) collectibles craze, explained

Would you pay $208,000 US for a highlight of LeBron James dunking? Someone did. (Thearon W. Henderson/Getty Images)

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If you've spent any time on social media over the last few weeks, there's a good chance you've asked yourself: why is everyone talking about NBA Top Shot and what even is it?

Hopefully this will help you understand (maybe even appreciate) the hottest thing on the internet right now:

What is NBA Top Shot?

It's been billed as "the future of the trading card market," and that's a good place to start because just about everyone is familiar with sports trading cards.

Basically, Top Shot is an online marketplace for buying, selling and trading digital NBA cards. But, instead of physical pieces of cardboard with players' photos and stats on them, Top Shot's "cards" (which are called Moments) are built around specific video highlights.

So, for example, you can get LeBron James' monster dunk on a Sacramento big man from November 2019. Or even less-memorable stuff like an off-the-dribble three-pointer by Fred VanVleet against the Knicks on Dec. 31. The Moment package includes multiple angles of the highlight (set to music) plus some fun-looking graphics and info like game and player stats that you'd expect from traditional cards.

How do you buy them?

Two ways. You can either purchase an individual Moment from another user in the marketplace (at whatever asking price they set) or buy a pack from the Top Shot site itself. Similar to those old-school packs of cards with the bubble gum in them, a Top Shot pack contains a handful of Moments and you don't know exactly which ones you'll get until you open it.

All this happens on the NBA Top Shot website, which is operated by a Vancouver-based company called Dapper Labs that is officially licensed by the league. The platform uses blockchain technology — the foundation for cryptocurrencies like Bitcoin — to record who owns what and ensure that no one can, say, go into the ledger and duplicate a bunch of Moments for themself.

OK, so how much are these Moments worth?

Are you sitting down? That LeBron one we mentioned earlier sold for $208,000 US this week in the Top Shot marketplace. Obviously, that's an outlier. LeBron is one of the best players of all time, the dunk is objectively awesome and the Moment is rare — only 49 were made. Kind of a perfect storm.

And yet there are even more expensive Moments in the marketplace right now. A Ja Morant dunk from last season that is also awesome — and twice as rare as the LeBron Moment — is currently listed for $240,000. Four days ago, it sold for $100,000.

What if I don't have six figures lying around?

You can still buy some "common" Moments for less than $20. But these are pretty boring — stuff like a Bojan Bogdanovic layup from January (he did a nice spin move, but still). Anything involving a more interesting player and/or exciting play will cost you quite a bit more.

That's why many Top Shot collectors are turning to packs. The site sells these for as little as $9 and as much as $230, depending on the quality and rarity of the Moments in them. So buyers have a chance of scoring a super-valuable card for a relatively low price. Like buying a lotto ticket.

But good luck getting a pack. They've become so popular that, for today's release of new Moments, around 200,000 people were in virtual "line" to buy the ~11,600 packs made available (for $99 each). So your chance of landing one was about 6 per cent.

In fact, good luck even signing up for a Top Shot account right now. So many people are clamouring to join that signups have been disabled on the website for the better part of the last two days. I know because I tried to register (purely for journalistic purposes, of course!). Top Shot literally can't keep up with the demand right now. In the six months since it went live, the site's 350,000 active users have engaged in more than $200 million in sales — and climbing fast. Top Shot reportedly did $37 million on Monday alone.

Why did this get so popular (and lucrative) so fast?

As always, a variety of reasons. Too many to cover here. But, on a macro level, there's a subset of people — mostly young, male, professional, internet- and finance-savvy types — who've had a lot more time and money on their hands since the pandemic hit. We saw their market-making power on display last month with the GameStop stock craze. NBA Top Shot is right up their alley too, offering an appealing mix of sports, gambling, market speculation, and even a whiff of crypto — all on an attractive, user-friendly website. A lot of people driving the Top Shot trend are active in the online sports betting/fantasy community too. It's probably not a coincidence that it really took off after the NFL season ended, during a dead zone for gamblers.

It's also important to know that traditional sports cards are in the midst of a boom too. Several have gone for record prices at auction recently, including a Wayne Gretzky rookie that fetched $1.29 million.

But the process for buying and selling old-school cards is cumbersome. To get top dollar, your card's physical condition needs to receive the highest possible grade from a recognized professional appraiser. That means shipping it to them (a pain, and not cheap) and waiting for them to get around to it. Only a few companies provide this service, and they're backlogged right now as they struggle to keep up with skyrocketing demand. So it can take months to get your card back and ready to sell. And there's no guarantee it'll get the grade you're hoping for.

NBA Top Shot has eliminated that problem. The items in your collection are all digital. They can't physically deteriorate, so there's no need to have their condition graded by anyone. In some ways then, Top Shot is just a more convenient way to collect cards — or at least something like them.

How long will it last?

That's the $200-million (and climbing) question. At some point, the market for NBA Top Shot Moments will surely cool. Then what are they worth? As a Top Shot critic might point out, you own the Moment, but not the moment. Which is to say, you're not buying exclusive rights to a highlight from the NBA. Anyone can still go online, google "LeBron dunk vs Sacramento" and watch the play for free on several different YouTube channels. Here it is right here.

All you're actually buying is NBA Top Shot's unique packaging of the highlight and the guarantee that they only produced (and ever will produce) an exact limited number of this particular Moment. But people have decided that combination is worth a lot of money — and they're betting it'll be worth even more tomorrow and the next day.

Maybe this seems silly to you. And maybe the bubble will burst like it did with Beanie Babies in the '90s or Dutch tulip bulbs in the 1600s — or, hell, like sports cards in their last boom. But right now, NBA Top Shot is having a moment.

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