Alright, let’s dive into this Caitlin Clark NFT nonsense. In fact, one of her digital trading cards recently sold for more than $51,000! That’s worth a lot more than a top NFL prospect’s NFT. Sounds crazy, right? Their excitement is truly contagious! The hype machine behind her Rookie of the Year campaign is impossible to miss. Before you dive in head first, let’s pump the brakes and take a sober look at some realities.

Is This Hype Justified Though?

Look, I get it. Caitlin Clark is a phenomenal athlete. She's exciting to watch, and her future looks bright. Does that really make it worth a five-figure price tag for a digital card? We’re speaking about a non-physical asset, a JPEG really, hanging on to the coattails of blockchain technology.

Compare that to the Beanie Baby bubble of the late ’90s. Remember those? The public was sold that they were going to be worth a mint. Unfortunately, most of them today sit crumbling in attics worth only pennies on the dollar. Is this the 21st century’s Beanie Babies, and NFTs here to keep the status quo intact? The fear of missing out is a far stronger motivator and yet, more often than not, a poor investment strategy.

NFTs, Dot-Coms, and Tulip Bulbs

This entire NFT marketplace is an incredibly close parallel to the dot-com bubble. Investors threw money at literally everything with a “.com” in the title. They did so without worrying whether the company had a sustainable business model. And of course, who can forget the notorious Tulip Mania of 17th century Holland. Folks were shelling out the equivalent of millions for single tulip bulbs, sure that they would continue to increase in value. Spoiler alert: they didn't. History is riddled with speculative bubbles and the NFT market certainly has all the signs of one. This envy that other people are getting rich and you’re not is a big signal flare warning that you’re deep inside a bubble.

Yet there is a deep sense of curiosity and tangible wonder at the tech. Don’t allow your fear of the unknown to hold you back.

Unintended Consequences Loom Large

We’ll assume the greatest player in college basketball history, Caitlin Clark, gets injured and something odd happens. (Knock on wood, of course!). She gets injured, or her performance declines. What does that mean for the value of that $51,000 NFT? It could plummet. Poof! Gone.

It’s unclear if this NFT boom will really be a net positive for the players and league. Or will it simply create another avenue for speculation to potentially use their name and likeness in a harmful way. Here’s where that centrist economic perspective kicks in. Perhaps most importantly, are we building a system that truly rewards talent and hard work? Or are we just feeding a kind of speculative frenzy that’s making a few people very rich and making everybody else much poorer? Are you communicating core values that you would like to promote in your community and be known for?

NFTs aren't inherently bad. They promise to do great things, especially in fields such as digital ownership authentication and helping form new income opportunities for artists and creators. The hype bubbling up around them today, particularly in the sports industry, seems just plain unsustainable. It’s much more speculative, much more FOMO (Fear Of Missing Out) related, not anything based on utility or intrinsic value.

It's easy to get caught up in the excitement and believe that you're getting in on the ground floor of the next big thing. Then, before you blow a mortgage payment on some Caitlin Clark NFT, pull yourself together and think critically. As always, do your own research before making any NFT investment! Understand the risks. And ask yourself: am I investing, or am I gambling?

  • Market Volatility: The NFT market is notoriously volatile. Prices can swing wildly, and there's no guarantee that what's valuable today will be valuable tomorrow.
  • Lack of Regulation: The NFT market is largely unregulated, which means there's a higher risk of fraud and manipulation.
  • Liquidity Issues: It can be difficult to sell NFTs quickly, especially if the market cools down.

Well, then comes the shock of just how high the price can be. It’s wonderful to think you now own a piece of that history! Don’t let your heart get ahead of your head. Be prudent. Be skeptical. Nobody knows what the future of NFTs holds, and it’s all but assured that this is a bubble that will eventually go pop.

The surprise of how high the price can go, and the joy of owning a piece of history is overwhelming. But don't let your emotions cloud your judgment. Be prudent. Be skeptical. The future of NFTs is uncertain, and it's entirely possible that this is a bubble waiting to burst.