Can One Crypto Token Be Worth $70,000? – The Value of Collectibles

In today’s Money Morning…a chat comes to an abrupt halt…I nerd out down memory lane…will my Zion token deliver riches?…and more…

I was working away in my office this morning when my wife burst through the door. This isn’t uncommon in my house. She often likes to bring in my son before nap time to see Daddy. Sometimes it’s just to report he’s done something funny.

And to be honest, sometimes a little power break can be a good refresher.

Anyway, today she came in because it was my son’s first birthday last weekend, and a friend of ours had given him some plastic golf clubs. My son has not put down the clubs since he got them.

They are easily the most interesting thing he now has. Add to the mix we bought him a small ball pit, full of 250 plastic balls for him to mess about in. And now the favourite game is to toddle up to the ball pit, proceed to remove 10 to 15 balls, and then smack them about with one of the plastic clubs.

My wife burst in because she’d rolled him one of the plastic balls and he’d hit it back to her with the club. It was a little bit of a ‘you had to be there’ moment. But she was excited, and therefore so was I.

Also secretly I’d love him to become a professional golfer. I’ll pull out all these videos when ESPN does a ‘30 for 30’ on him after the first couple of major wins. Nice and embarrassing!

Back to the story…we then proceeded to talk about his development over the last year and things to come. She was talking about how she’s really looking forward to Christmases when he bursts through the bedroom door in pure excitement saying, ‘he’s been, he’s been’.

Obviously referring to Santa, his excitement at the bundle of pressies under the tree will be infectious.

Whilst lingering in this thought I added to the mix:

And the first time he opens a present and it’s a new PlayStation 7 with haptic VR kit. Then Daddy can explain how when he was a boy his first console was the original Nintendo Entertainment System, the NES, with a laser gun and Duck Hunt game.

My wife retorted, ‘Yeah sure, you can enjoy all your nerd stuff with him, go for your life. I’ll leave that with you.’

At this point, somewhat shot down I said, ‘nice chat,’ and our discussion was amicably over.

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Is my mint Battletoads worth anything?

I then turned to the display cabinet in my office to look at my array of early gaming collectibles. I’ve been slowly amassing some old kit again over the last few years.

You see I’ve got a bit of an inclination towards memorabilia. I love a good collectible. Both from a fond memory point of view, but also potentially from a bit of a financial view. The current collection isn’t worth loads, but there are a few items that might be worth something…someday.

Not that I plan to sell them. Or maybe I will. But probably not.

There’s a sealed, original Battletoads game for the NES. It’s in mint condition. I’ve got no need to unwrap it and play it, because I can play it as a ROM on an emulator on my smartphone now.

There’s also a Gen-1 iPod that still works. Not worth much, but maybe in 100 years it might be, when all our music is implanted and streams from our minds.

There’s also a mint condition portable Minidisc player that I bought 20 years ago, also still working. Not worth much though.

There’s a splattering of NBA Basketball cards from the 90s and some original Ninja Turtle action figures…and one of the Biker Mice from Mars.

It’s mainly nostalgia. But it got me thinking. What new things today might be valuable nostalgia in the next 20 years? When my son is 36 and has a child of his own, is there anything today that exists that might be so rare and collectible in the future that he or his kids can hold it and pass it through the generations?

Maybe my Battletoads game will live on for 100 years. It is the closest thing I’ve got to a ‘mint’ collectible. But what about these new Samsung Z-Flip folding phones or the new Motorola Razr? Both over US$1,000 now, in 20 years’ time, mint, unboxed, sealed packaging — will they be worth $2,000, $5,000, $10,000? As a collectible?

I’m not sure. I didn’t expect that an unsealed NES DuckTales might fetch over $1,500 a couple of decades later. Perhaps I shouldn’t have ripped it open, thrown away the box, and literally played it ‘til it broke.

So who knows? But what we do know, is there’s a strong market these days for all things collectible.

And the rarer they are, the more value they can generate.

A great example would be something like a Michael Jordan rookie card. Some of those original ones, maybe even a signed one, will fetch in excess of $10,000. I’ve seen ones for $70,000.

Some kid that pulled one out of an Upper Deck pack back in 1983 probably wasn’t expecting that. And if they didn’t like Jordan, maybe were more an Isiah Thomas fan, maybe even traded it away.

Today, the hottest rookie in the NBA is Zion Williamson. He’s the man-child (he’s 19 and 6’6”, 225 pounds) that’s smashing a whole host of NBA rookie records in his first 10 games.

There are like 20 versions of Zion rookie cards now. But already the market is hot for them. Signed Zion rookies cards are fetching money upwards of $1,500–2,000. And this is for a kid that’s yet to crack 1,000 NBA points.

Such is the awareness of collectibles markets now, that if he lives up to the hype and is this decade’s Jordan, then maybe it’s a shrewd investment today. Maybe a $1,500 investment today turns into a Jordan-esque $70,000 in 20 years’ time. I’d take 45 times my initial investment for a piece of shiny printed cardboard with a text scribble on it…

Proof it’s already happening

The really interesting thing I think will define the market for collectibles is the creation of non-fungible tokens (NFTs). These are cryptocurrency tokens that are one of a kind. They might be a particular reward in a game, they might be a digital representation of a limited run piece of artwork, or they might represent the identity of a famous sports person.

For example, you could develop NFTs for every NBA player in the league. Each token represents that player and is licenced and endorsed by the NBA as an original.

These NFTs could be auctioned off. Or randomly allocated to ‘packs’ of NFTs that you can buy from the NBA shop.

They could even develop variants of these NFTs, just like variants of the basketball cards that exist today. They could develop rare ones, or they could release a limited run of 20 or 200.

But with the NFTs there would be a permanent record of them on a blockchain. And a visual representation of them through an app or platform. That helps prove provenance. And it also verifies the rarity of the token/collectible. And it makes it widely accessible to the mass market.

Formula 1 are doing this already in their partnership with Animoca Brands Corp Ltd [ASX:AB1] and the F1 Delta Time game. They’ve already auctioned off several one-off cars as NFTs. One of the early cars, the 1-1-1, sold for a final auction price of over 415 ETH, which was over $110,000 at the time.

This is what collectibles look like in today’s world. And perhaps it’s one of the biggest opportunities for investors looking for alternative assets to slide into the wealth strategies.

We’ve seen that sports teams are already looking to monetise this kind of thing with Manchester City in the Premier League, looking to create NFTs of their players for a blockchain-based game.

Imagine the potential that opens up, if organisations like the NBA, NFL, AFL, and Premier League start to follow suit. I can see a future where at the turn of the century my grandkids are all trading NFTs of their favourite basketball players. And maybe one of them even gets a Zion NFT rookie token that Grandpa was smart enough to tuck aside back in the 20s.

And maybe that Zion Rookie Token is now worth $70,000 too?

NFTs and their application as collectibles is an exciting new development. It’s a burgeoning market and an opportunity to definitely keep an eye on.

And I might add, the foundation of this new type of investment, this new collectible…is crypto. It’s just another use case for this still much maligned wealth-creation megatrend.

Regards,

Sam Volkering,
Editor, Money Morning

PS: Top Four ASX Stock Picks for 2020 – I reveal four of my favourite ASX stocks that I think investors should own in 2020. Click here to find out.


Sam Volkering is an Editor for Money Morning and is small-cap, cryptocurrency and technology expert. He’s not interested in boring blue chip stocks. He’s after explosive investments; companies whose shares trade for cents on the dollar, cryptocurrencies that can deliver life-changing returns. He looks for the ‘edge of the bell curve’ opportunities that are often shunned by those in the financial services industry. If you’d like to learn about the specific investments Sam is recommending in either small-cap stocks or cryptocurrencies, take a 30-day trial of his small-cap investment advisory Australian Small-Cap Investigator here, or a 30-day trial of his industry leading cryptocurrency service, Sam Volkering’s Secret Crypto Network here. But that’s not where Sam’s talents end. Sam specialises in finding new, cutting edge tech and translating that research into how the future will look — and where the opportunities lie. It’s his job to trawl the world to find, analyse, research and recommend investments in the world’s most revolutionary companies. He recommends the best ones he finds in his premium investment service, Revolutionary Tech Investor. Sam goes to the lengths of the globe and works 24/7 to get these opportunities to you before the mainstream catches on. Click here to take a 30-day no-obligation trial of Revolutionary Tech Investor today. Websites and financial e-letters Sam writes for:


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