Trading Cards Are Booming And Growing On The Blockchain, But Are They A Bubble About To Burst? Panini VP Says No.

Image of a Patrick Mahomes trading card with blockchain technology, courtesy of Panini America.

The physical and digital trading card market is exploding. A Kobe Bryant 1996-97 Topps Chrome Refractor card recently sold for $1.79 million and, in January 2021, a 1952 Topps Micky Mantle card sold for $5.2 million, which is currently the most expensive sports trading card to be sold on the secondary market.

One person who does not believe that the boom in trading cards is close to being a bubble is Jason Howarth, Vice President at Panini America. He says that people are purchasing rare trading cards like the 1-of-1 Luka Doncic that went for $4.6 million this year as an alternative asset and justifying acquisitions as another form of investment. In fact, Howarth proudly makes the claim that trading cards have historically outperformed the S&P 500, which is something commonly heard from people in the industry.

On the latest episode of the How to Play the Game podcast (Apple/Spotify), I spoke with Howarth about Panini America's commitment to digital trading cards and building on the blockchain, how he views the rise of non-fungible tokens (NFT) like NBA Top Shot, what makes him most optimistic about further growth in his space, and much more.

It was interesting to hear from Howarth about just how committed his company is to the blockchain. While Panini America officially launched its first digital trading cards nearly 5 years ago, its breakthrough in blockchain came in January 2020, when it became the first trading card manufacturer to introduce blockchain elements with its physical cards. It began including a chainlink logo on blockchain-enabled cards to simplify the recognition process for customers.

Since January 2020, Panini America has dedicated additional resources to building out a more robust blockchain product. Now, it also sells pure blockchain assets that are not connected to a physical card, releasing new blockchain-only cards on a weekly basis. Panini America introduced its first David Beckham blockchain card in February when it announced signing Beckham to an exclusive autograph and memorabilia deal.

It took Panini America a couple of years to figure out how to best connect blockchain technology to trading cards. Luckily for the company, it got a headstart before the recent surge in other blockchain-related assets such as NFTs. The first thing that Howarth says his company discovered was that people have a really hard time grasping what it means to have a blockchain-based product. Panini America then decided that it would not tie purchases of Panini America products to a certain type of cryptocurrency or cryptocurrency at all. With so much volatility already existing in the trading card space, Panini America did not think it wise to introduce additional uncertainty by requiring purchasers to convert U.S. Dollars to crypto.

As the exclusive trading card partner of the NBA, it is impossible for Panini America to ignore the growth that a separate NBA partner -- NBA Top Shot -- is experiencing in the past few months. That growth was previously reported on at Outkick and, over the past 30 days, a total of $293.2 million in sales have been transacted on the platform. Instead of being jealous, Howarth is encouraged. He thinks that the growth of NBA Top Shot provides awareness to consumers about the blockchain space and that it is positive to have consumers talking about the blockchain as Panini America continues to produce its own blockchain trading cards. NBA Top Shot sells video highlights; Panini America sells physical and digital trading cards. Howarth does not notice a conflict. He also admits to not currently owning any NBA Top Shot moments.

While Howarth is very bullish on blockchain, he is also very intrigued by the recent growth of the traditional, physical trading card industry. One big reason why he does not see a bubble is that the trading card industry, which has historically been largely relegated to the United States, has gained global interest through the strength of social media. Panini America launched a direct-to-consumer platform in China for the first time in the middle of the coronavirus pandemic and has seen strong results.

Howarth also thinks an important reason why trading cards of today may have more lasting power over vintage cards from the 1980s and 1990s is that there is no longer a willingness among manufacturers to oversaturate the marketplace with cards. There was no numbering back in the 1980s. Today, some Panini America cards are numbered 1-of-1 and every card in a Panini Flawless pack is numbered 25 or less. Scarcity is what is driving up the price of certain NFTs, and Howarth is hopeful that the same will remain true for trading cards.

Additionally, there is enthusiasm for the fact that it is not just NBA cards sending shockwaves throughout the industry. Right now, a Tom Brady 2000 Playoff Contenders Championship Ticket card has a top bid of $1.94 million with 3 weeks before the auction on it closes. A Patrick Mahomes rookie card recently sold for $861,000. This demonstrates that consumers are not only interested in vintage cards, but also modern-day options, and it also shows that physical cards are retaining value even as the digital boom is underway. Howarth says that there is a physical component to cards that will never be able to be replicated in the digital realm.