Market Situation
2022 has been a bit of a rough year for crypto, catalysed by bridge hacks, the depegging of stable coins, and exacerbated by the wider economic landscape — overall market conditions have rapidly deteriorated.
As the old adage states “every cloud has a silver lining” and if there is one to be found here it is that the amount of low-quality and scam style NFT projects, has largely been ameliorated by bear market turbulence. During the bull-run the NFT space became a wild west of rampant fraud and eventual over saturation. Even established global brands have had to reconsider their attempts to capitalise on the momentum in the web3 space with CNN recently announcing their exit from web3 with the closure of their project ‘Vault’.
All of these factors have caused many to question the value and sustainability of projects centred on NFT collectibles and their possible role in Web3. According to other reports, on August 20, the Ethereum floor price of the Bored Ape Yacht Club (BAYC) NFT collection fell to its lowest point since the year’s beginning. It took place in the midst of a general crypto market crash as well as an ongoing NFT market downturn. Its floor costs dropped below $100,000 this year. Since its record-breaking high of 153.7 ETH on May 1, the NFT project has been experiencing an overall decline.BAYC decreased to 69.69 ETH in August. In three months, the price had dropped by nearly 55 per cent.
Aside from unique buyers and transactions, average sale value of NFTs has also decreased. The average sale price dropped 77% from $511.33 in January to $115.15 in July. The third quarter of 2022 saw $3.4 billion in NFT sales, down from $8.4 billion the previous quarter and $12.5 billion at the market’s peak in the first quarter of the year, DappRadar said.
Sports NFTs
There are still many reasons to be optimistic about the NFT market with Sports NFTs having taken centre stage this year. The two main forms of tokenized items are: limited edition collectible video clips and player trading cards. By the end of Q4 2022, sports NFTs are predicted to have grown by 60% and in a decade, the NFT sports collector market is expected to reach $92 billion.
Demand has resulted in the development of specialized sports NFT marketplaces. The market for sports IP rights in the blockchain sector is fiercely competitive with many brands partnering directly with blockchains to develop new exciting products for fans. Sports leagues have played a vital role by engaging in contracts to launch new trading cards and NFTs of historical game moments. Almost every major sports league has an exclusive trading card contract with a web3 partner.
Sports memorabilia is the highest valued sports collectible. Several factors have contributed to large increases in sports memorabilia prices in recent years. This includes the growing affluence of baby boomers, the presence of millennials in the market, and increased foreign buyer interest.
Game-used items such as balls and jerseys are very much in demand, while baseball trading cards held ‘a remarkable market share’ in 2021. Sports apparel jerseys currently hold a 30 per cent market share. Dapper Labs’ NBA Top Shot NFTs, which feature collectible video “moments” that can be bought, sold, and traded, have continued to grow in popularity, and the company has expanded to include UFC and NFL memorabilia.
Ticketmaster recently announced a partnership with Dapper Labs to leverage the Flow blockchain to attach NFTs to tickets.
Meanwhile, Sorare, which began with a fantasy NFT soccer game and expanded into MLB this summer, announced an expansion into NBA NFT gaming on Wednesday. The basketball game, which is anticipated to be released early in the NBA season this year, will include tournaments using NFT-based player cards, similar to its other games, but with NBA-specific features. It will also have a marketplace, similar to its other games, where individuals can purchase and sell items.
Sorare has witnessed 250,000 new signups and $5 million in MLB trade volume since launching its MLB product in May.
Why are Sports NFTs doing well
As the digital assets market grew into a multibillion-dollar sector last year, sports-related collectibles proved to be one of the most popular types of NFT. Sports NFTs combine the passion of sports fans with the security and trust of the blockchain.
Opportunities for NFTs in sports go far beyond just collectibles or fantasy games. Sports teams or leagues can use NFTs to sell shares of teams, to sell seats, granting fans access to exclusive areas in the stadium or merchandise or to allow them to get unique digital moments of a game they attended. Its unique value proposition is the combination of traditional fandom with the power of technology to raise engagement.
There’s also scarcity. With limited-edition collectibles, people feel like they’re getting something special, something that they can’t get anywhere else. That’s why rare items like sneakers and concert tickets are so coveted — they’re unique. And that’s what sports NFTs offer: a chance to own a piece of history.
Rising interest in big international events, new and creative venues, and the rise of young sports are other factors contributing to the success. Sports-related NFTs are adaptable and can be utilized for a wide range of applications, including betting, fan groups, and merchandise. The sports NFT community is passionate and involved, which contributes to increased interest and excitement.
Conclusion
With sports NFTs, you’re not just investing in a team or a player — you’re investing in the entire ecosystem. You’re buying into the future of sports.
Plus, there’s already a ton of activity in the sports NFT market. Just this year, we’ve seen some major deals go down, and we can expect even more growth in the years to come.
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