Marketplace Monday: Market Volatility
There's too much to buy on the marketplace! Today we're going to look at the volatility relating to the market and why you should be holding onto nearly every Moment.
As I’m writing this, the value of my Moments keep tanking and tanking. I’m sure many of you are experiencing the same with your accounts and the Moments you decided to invest in. This is especially true if you joined and started buying Moments in February.
In February, Top Shot reached a high of over $40 million in sales in just a single day. To put this in perspective in the last week, Top Shot has done just over $17 million in sales, down 23% from the week prior. In under two months, the marketplace has plummeted, coming down from what it was, and is experiencing its first crash.
Now, Top Shot is averaging about $2.5 million in sales a day. This is quite a drop-off from what we were witnessing in mid to late February. Top Shot hasn’t even led in weekly sales out of all NFT’s with CryptoPunks leading the way for the previous three weeks.
A couple of reasons have contributed to this crash. In February, NBA players caught onto the wave with multiple players posting on social media about Top Shot, and some even streaming while opening their packs. These players weren’t just your average players, though, and the backing they had behind them, such as their followers and fans, followed them joining the Top Shot surge, contributing to the boom. Plus, reports of some of the biggest NBA stars, such as Kevin Durant, investing in Top Shot over a year ago, only brought in a surplus of collectors.
Some of the players that have now invested in Top Shot or contributed to the boom in late February were:
Potential Rookie of the Year, Tyrese Haliburton
15 year current NBA veteran, 15th all-time on 3-point field goals made, and now successful podcaster, JJ Redick
One of the best 3-point shooters in the association and fellow podcaster with JJ Redick plus managing his podcast, Duncan Robinson
Former NBA Champion Harrison Barnes
Rookie first-round pick, son of Greg Anthony, Cole Anthony
Pelicans guard, NCAA Champion, and first-round pick, Josh Hart
3-point sharpshooter for the Golden State Warriors and Steph Curry's brother in law, Damion Lee
This is just the start of the list. It goes on and on with some of the most successful businessmen in the world, the most successful general managers, and investors investing in Top Shot. Some investments came after February but still drew traction to the website. This list includes:
Dallas Mavericks owner Mark Cuban
The best player in NBA history, Michael Jordan
Kevin Durant, as mentioned above
Sixers President and General Manager, Daryl Morey
Ashton Kutcher
Will Smith
Shawn Mendes
Rapper 2 Chainz
Pure insanity.
This is just the start for NBA Top Shot, and you can see the optimism these investors have in the product long-term. Remember that Top Shot has only been live since October 1st.
None of the people mentioned above are to blame for the current crash, as the sudden rise in sales had to return back to normal, but collectors didn’t realize, including me, that it would happen this quick.
With that said, what should you do with the Moments you invested in, and when will the market return back to peak prices?
To answer the first part of the question, HOLD YOUR MOMENTS!
At first, Top Shot was viewed as a get-rich-quick scheme, with collectors looking at some of the “whales” of Top Shot who invested a certain amount for their accounts to now be worth millions. These whales, or people who invested a much larger sum than your typical collector, are collectors who experience a significant rate of return and are at the top of the top in money earned from their investments. Everyone was striving to be a part of this group, investing in Moments they could try and flip within a week for 10x value. Safe to say, this didn’t happen for most collectors, and now their account values are plunging.
All of the Moments that I’ve invested in are Moments that I believe will have long-term value and survive this crash, such as Joel Embiid’s first Top Shot Moment, a handful of rookie first baskets, and numerous amounts of Season 1 Moments. All of these I expect eventually to climb to where they were during the February boom - and with more users eventually inevitably joining, more than there were in February, there’s a solid chance these Moments will be worth even more than what they were in February.
I view Top Shot as a multi-decade NFT, and there’s no reason to panic over two months of depreciation. There’s no reason why I should sell any of these Moments for below what I’ve bought them for when there are around 470,000 Top Shot accounts and over 2 billion NBA fans. We’re still very much at the beginning.
The only Moments that I’m listing are Moments that I get from packs that I don’t see having value down the line. Other than that, nothing I’m putting up for sale is for below what I’ve bought because I believe in these particular Moments and can see in years from now that Season 1 Moments can be collector’s items if there are millions of collectors on Top Shot.
The second part of the question is more complicated. It's almost like asking when will a particular stock go up or down.
The way the market will return to where it was in February - is when there are more users and more promotion of Top Shot. The initial wave was experienced by a new type of marketing, NBA players. NBA players exposed the product to thousands who had never heard of Top Shot with an instant reaction of thousands of collectors joining, rocketing Moments’ prices.
The marketplace itself will be much more stable when there are more collectors on Top Shot. Currently, we’re in a very volatile market with certain Moments prices changing rapidly by the hour.
@Roham has hinted that marketing will eventually come to Top Shot, but only when the product is truly ready to sustain the number of users they want and expect to flood to the website. Don't expect mass marketing to come until Top Shot is out of beta. Although, on the official NBA tickets page, there is now a Top Shot referral.
The next influx of users could come at any time, though. It might be during the playoffs, during the off-season, during the start of next season, but most definitely will happen once Top Shot is out of beta. Nobody knows when this will happen.
For now, the marketplace is a buyers market, and if you have the funds to scoop up more Season 1 Moments or Moments that you think will have sustainability, do it soon, but always keep in mind that the market could continue to tank. But if you know that Moments will have value years from now, I think this is the perfect time to buy as we’re where we were in January.
Almost every Season 1 Moment is underpriced, hence why I’m writing this on the marketplace. There are too many Moments to list, including three badge rookies and even specific Season 2 Moments. The list would be longer than the number of investors invested in Top Shot right now, with that list only expected to expand.
All views are my own.