Are NFTs a good investment?

Why all the hype?

There are NFTs in all kinds of assets. They have garnered a lot of attention this year as a result of NBA’s Top Shot, the NBA’s partnership with Dapper Labs. The NBA has consistently shown it is at the forefront of technology. This is no exception.

The NBA licenses its reels to Dapper Laps. Dapper Labs then digitizes the footage. Dapper Labs only makes a limited amount which makes them scarcer and, as a result, more valuable. Some NFTs feature highlights in different angles and digital artwork. Copies of a specific Top Shot moment are given a serial number which indicates how many are produced. Lower the serial numbers are considered more valuable. Serial numbers that match the player’s jersey number are also considered more valuable.

On February 6, 2020, LeBron James made a tribute to Kobe Bryant with a soaring dunk that was nearly identical to Kobe Bryant’s move on November 18, 2001, against the Sacramento Kings. This dunk was digitized by Top Shot. Jack Settleman, creator of the popular Snapchat feed called “Snapback Sports,” purchased the number 23 serial copy of the LeBron James tribute dunk from Top Shot in January for $47,500.

Another LeBron James highlight from November 2019 sold for $200,000. A Ja Morant dunk highlight is currently on the market for $240,000.

Not all Top Shot moments are hundreds of thousands of dollars. The value is a result of the player, the moment, the number of copies and the actual serial number. Right now, there is a Troy Brown Jr moment on the market for $16 and one for Brown for $250,000.

All types of investors are purchasing Top Shots, including traditional stock market investors, sports bettors, fantasy gurus, crypto investors and even NBA owners, such as Mark Cuban.

So far, according to one of Dapper Lab’s executives, NBA Top Shot has generated over $230 Million in sales so far.

While NFTs aren’t new, they have received a lot of attention recently with the newest creation from the NBA.

Author: Lucy Green