NFTs, Top Shot, and the Greater Fool Theory
What one NBA highlight tells us about the NFT bubble
The speculative frenzy surrounding NFTs (non-fungible tokens) has only gotten more frenzied since I wrote about it for Marker last week, with an NFT of an artwork by digital artist Beeple being auctioned off by Christie’s for more than $69 million. But incomprehensible as that sale was, the Beeple piece at least has the virtue of being unique — the person who bought it knows that it’s the only one in existence. What’s more mysterious, I think, is the fact that NFTs that are being produced in large numbers and are therefore not really unique are nonetheless being sold for thousands of dollars.
This was brought home by a recent piece in the Wall Street Journal about collectors who have made tremendous amounts of money (at least on paper) by getting in early on the craze for NBA Top Shot moments, which are NFTs of NBA highlights. As the Journal correctly states, Top Shot is both the most popular and the most “confounding” NFT market, and this article provides a perfect example of the bizarreness of Top Shot prices in the form of an NFT of a layup by the New York Knicks’ R.J. Barrett that currently costs almost $2,000.
