Sports NFTs are the new trading cards for collectors, but be careful

Non-fungible tokens are shaking up the digital world and are a new breed of sports trading cards, but understand the risks.

First it was tennis and cricket, and soon Australia’s other major ball sports should be enticing collectors and investors into the brave new world of non-fungible tokens

Better-known as NFTs, these are unique pieces of digital art, videos, in-game items or other data stored on a digital ledger known as blockchain and purchased using cryptocurrencies.

The total market is forecast to grow to about $100 billion within three years.

Basketball led the global NFT sport collectable trend with the hugely-successful NBA Top Shot collection of video highlights, while Tennis Australia launched them at the Australian Open in January. Cricket NFTs were launched by the ICC in January too, allowing collectors to buy video highlights of Aussie and international cricket stars.

It is understood that football codes and the National Basketball League are working on their own NFT projects.

The tennis NFTs on the sweet.io platform include digital artworks of racquets, umpires’ chairs and short videos of famous matches and players. More than 3400 have been launched since January and about 1500 have been sold – ranging in price from $9.99 to $2500.

This Australian Open NFT of Evonne Goolagong Cawley is selling for $249.99.

Tennis Australia’s metaverse and NFT project manager, Ridley Plummer, says the AO Decades Collection of NFTs will remain available until sold out, and a marketplace function will open soon to allow owners to trade their assets.

“From our standpoint, success was getting the project up and running,” he says.

“We weren’t going to measure success by how many we sold, how quickly we sold them or the price we got for them. We have taken a lot of learnings from this first iteration.”

While each NFT is unique, there can be thousands of versions of one video, image or other file – just like non-digital artwork prints. Anyone can create any amount of NFTs at any time, and too much of any product can push prices down.

“We are seeing that in Top Shot at the moment … there’s an oversupply in the market right now,” Plummer says.

However, some Top Shot NFTs sell for crazy prices – several LeBron James videos have fetched more than $100,000.

The ICC cricket NFTs attract some big prices too, with a video of a four hit by Indian great Sachin Tendulkar in 1992 selling for $17,000 this month.

ICC head of digital Finn Bradshaw says it launched its NFT program because “we think this is the next evolution of fandom”.

“It allows cricket fans to own some of the most iconic moments in ICC cricket history … we are still in a beta phase, but it’s been really exciting to the see passion of those fans who are involved in it so far,” he says.

An ICC cricket NFT on fancraze.com of a Mitchell Starc wickeet.

Australian cricketers on NFTs include Pat Cummins, Steve Smith, David Warner, Michael Clarke, Meg Lanning and Beth Mooney, and Bradshaw says the fancraze.com. marketplace that offers them will include “more legends of the game”.

“Blockchain technology enables trackable ownership that truly evolves the collectibles space and gives fans certainty for the future,” he says.

Tribeca Financial CEO Ryan Watson has noticed increased interest in NFTs and their potential financial benefits, and he sees a bright future for NFTs in sport.

“The challenge then is to pick the right ones to realise a return on your investment,” he says.

“Do your research. If you don’t understand what it is or what it does, stay away from investing in it.”

Cryptocurrency exchange CoinSpot market analyst Mack Robertson says more sporting leagues and teams are jumping on the NFT bandwagon.

Robertson says there is a big misconception that NFTs are a scam.

“It’s important to know that NFTs themselves are not scams or get-rich-quick-schemes,” he says.

“However, there are some crooks who are luring in and scamming people with hopes of using NFTs to become rich. There can be bad players in every industry, so it’s best practice to do your own research and due diligence.

“Aside from artwork and digital avatars, NFTs have various other use cases, including but not limited to, collectibles, online ticketing, proof of authenticity and document verification.”

Steven Penson invests in NFT art and will consider sport NFTs. Picture: Jason Edwards

“Every single NFT is unique – even if it’s in a large collection. There is only ever one of each single NFT, which is why they are known as scarce assets.

“Most NFTs are created on Ethereum’s blockchain, which is immutable and can’t be tampered with. This means that no one can undo ownership of an NFT or replicate the exact same one.”

Steven Penson, 28, started investing in art NFTs last year and says he would consider investing in sports NFTs because they are an evolution of collectibles from traditional baseball cards.

“Instead of a static image on a medium that is subject to environmental damage and degradation, sports NFTs will always remain in mint condition,” he says.

“To all the potential NFT buyers out there, the advice I would give is don’t invest more than you can afford to lose.

“Make sure you enjoy the art and get involved in the different communities – most of which you’ll find on Twitter or Discord.”

HOW TO BUY A NFT

1. Buy cryptocurrency on an reputable crypto exchange – Ethereum is the most widely-used digital currency for NFTs.

2. Create a crypto wallet through your exchange and transfer your crypto into it.

3. Connect your wallet to a NFT marketplace – opensea.io is the biggest, but several sport NFTs have their own marketplaces.

4. Buy the NFT at its listed price or make a bid. If its successful, you are an owner.

Source: CoinSpot

Originally published as Sports NFTs are the new trading cards for collectors, but be careful