Why Billionaires Are Buying Cards (And What It Means for You)

State of the Hobby 2025

Everyone keeps saying this is 2021 again. They're wrong. And if you're positioning like it's 2021, you're going to get hurt. 

I spent weeks treating the card market like an equity analyst treats a stock: pulling index data, PSA submission numbers from SEC filings, volume metrics by price tier. What I found changed how I'm positioning for 2026. 

In this episode: THE CORE INSIGHT, THE PSA PROOF, THE DEMAND SHIFT, CATEGORY BREAKDOWN (by sport+Pokemon), THE BILLIONAIRE SIGNAL, MY POSITIONING

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Transcript

0:13

Hello everyone, welcome to Slabnomics and this is the state of the hobby. months ago, when this was determined to be a bull market in 2025, Many influencers took to Instagram in order to compare this to COVID, the last bull run that we had in sports cards. They either had cautionary tales of how this wasn't going to end well, or they had greed-driven narratives about how this was only beginning. But what I didn't see much was looking at the data to see how it was different. So I spent the last few weeks doing what I don't think anyone else has done. I pulled the data, I looked at sales volume, And I treated the card market as if I were an equity stock analyst. What I wanted to do was see where the money was actually flowing. And what I found changed how I position my own sports card portfolio. Here's the thing. There is a bull market happening. That part's true, but the structure of this bull market is fundamentally different from 2021. The demand is real, but it is flowing in the opposite direction, and most people don't see it yet. Today I'm going to walk you through what I found from the data, category by category. I'll tell you what I found, but what I'm also betting against what I found within the data. And why? Because that's what this show is about. Honest analysis, even when the analysis makes my thesis harder to defend. Before I get started, please keep in mind the ways that you can help this channel. You can like it on the platform that you're at. Please give me a follow on Instagram at Slabnomics and as always share with a friend. Now I'm going to tell you first the observation that unlocked everything. In 2020, COVID hit. The tailwinds of boredom, stimulus checks, cards are the new stocks narrative. That demand shock was simultaneous across all markets of all categories. Pokemon, basketball, soccer, baseball, football, they were all the same. Everyone got in. But here's what the data shows that I was surprised about. They didn't peak at the same time and they didn't move afterwards in the same way at all. They didn't recover the same way. Here's what that looked like in Pokemon, basketball and soccer. They all peaked Q1 of 2021 and then they corrected different levels. Pokemon corrected 25 to 30 percent. Basketball corrected 50 percent and then soccer corrected 60 percent. So what about baseball and football? They peaked in mid 2022. 12, 15 months later and they corrected 20 to 25 % for baseball and 45 to 50 % in football, So how do we make sense of all these different markets peaking at different times and also correcting and recovering in such different ways? We had the same demand shock, but we had different supply structures and these led to different outcomes. What I'm hypothesizing here is that markets that had thin supply of graded cards, Pokemon, basketball, soccer, these ran out of willing sellers very fast. They spiked hard and they corrected sooner. But markets with deep supply, more traditional asset classes, if you want to look at it that way, in baseball and football to some extent, they took longer to exhaust those new sellers. They peaked later. and they had different correction patterns. So this told me something I hadn't really fully appreciated, that supply structure was determining the market character. Demand was igniting these moves, but supply structure determines the duration, depth, and sustainability of that market movement. Once I saw that, I couldn't unsee it. And it changed how I look at every single category. So what's the real difference between what happened then and what's happening now in 2025? the demand flow is entirely different. The most important thing that I found is that in 2021 demand flowed up. It started in the low end and it flowed into mid end and then eventually reached into high end. and think about it. It makes sense in the low end. That's where everybody was getting stimulus checks. They had more money than usual. they were also coming newly into nostalgia and us Millennials having a little bit more money in our pockets and it flowed up into the middle end where everybody could go and become a sports card flipper. Everybody could go and sell cards at shows. Whereas before it was just these old crusty guys that have been doing it forever. And then it took longer to be adopted in the high end. Why? Because people in the high end were dealing with some pretty big macro problems at the time. Them looking at sports cards was one of the last things on their minds. Now 2025, if you think about where we are now and how that contrasts to that time period. Some major events that happened in 2025 really fueled demand and fueled the news agencies and cycles. We had Kevin O'Leary creating his fund at the top, spending massive amounts of money on these rare cards and putting them into an index. We had fanatics taking over the licensing in football and basketball, huge movements that redefined how heirs of collectors viewed the hobby. So the growth catalyst for 2025 has been from the high end down. And crazy fact for you right now, we are only at 43 % of all time highs on low end as tracked by card ladder. Now, of course, I should probably defined what these markets are. Card ladder defines them as thus low end is cards under $500. Mid-end is $500 to $5,000, and high-end is any card over $5,000. So demand really started at that high end. That's where we saw these huge sales take place. and crazy enough, the high end index bears that story out. We're at 96 % of all time highs. and that's where volume first started kicking up in 2025. So high end, 96 % of all time highs, mid end is at 82%, and then low end, remember 43 % of all time highs. The demand just isn't starting from the bottom, and to be honest, it really hasn't even moved into it at all. So why does this matter? In 2021, all the new buyers were new entrants. We had stimulus money. We had a repopulization of the hobby and how important it was to their identities to be part of a community. In 2025, we're talking about participants reallocating capital. We're talking about a structure shift into alternate assets. That's something that I've been talking about a lot ever since January, February, And ever since the first episodes of Slabnomics alternate assets. and the part of the market that deals with alternate assets. That's the high end. So this rally that we've seen in 2025 hasn't been about recruiting a bunch of new people into the market. This new wave of demand that comes in. We're talking more about assets and how they're being participated in unless something changes the structure. So let's walk through category by category and I'll give you the data. What I think it means I welcome any disagreements that you have, any viewpoints that you have to feed into this picture as well. Be sure to pop over to Instagram. Let me know. So in Pokemon, it's up 113 % year to date and it's at 1.74x COVID's all time high. This is breakout territory. We're seeing 134 transactions across that index per day, and that's over 9,200 cards plus. This is a massive volume breakout, four to six X baseline. Here's the cool thing about Pokemon. It's got a hybrid supply structure. You have Vintage and you have Modern. Modern has continuous supply going. Vintage has all of the aspects that you would look at for a millennial loving scarcity and loving nostalgia that will continue to move on. over a long term plane and supply will no longer go up on that vintage. There's only one first set. Nineteen ninety nine. This thus gives you a scarcity floor from the vintage angle, but also gives you a continuous cycle of demand from all the modern printings that are very popular with the youth. As we go into other structures, I'm going to tell you right now this is probably the strongest structural market, but it also scares the hell out of me. The sheer volume of printing that new Pokemon products do, as well as all of the ways that people are taking advantage of the structure and distribution of new Pokemon cards, really gives me pause for how many people are going to get burned and how many people are going to be moving out of it. Pokemon's already started retracing a little bit. We'll see what happens. Moving on. big daddy of all the sports, baseball. Year to date, up 26%. It's back at all time highs, especially fueled by Ohtani and his dominance of the market. And it also showed the shallowest drawdown post-COVID, about 20 to 25 percent. Reasonably safe as far as asset classes go. It's got low velocity and just trades within its bands. If you want to use that terminology. So here's the thing about baseball compared to the other ones. Baseball has the broadest vintage market demand. So a lot of the demand for baseball is already tied up in those players that are no longer playing, that have scarcity, and they've had the market that's been going for the longest period of time. Baseball is the blue chip of the markets. So that's why baseball took a while to rev up in terms of demand for COVID. And that's why It didn't really fall that much afterwards. It's a pretty consistent market. You could call it a mature market. This is the market where collectors truly rule. and collectors don't sell into weakness. I'd trade within baseball during demand shifts, But all in all, if you're looking at a portfolio of broad stocks or alternate assets of sports cards, baseball is going to have a big part of it because it's just going to steadily grow if you're invested in the right companies, a.k.a. players. Alright, let's talk about basketball a little bit. It's an interesting one because it follows about the same time period as football. Year to date, it's up 46 percent. It's at 80 percent of its all time high of COVID. despite massive volume increase in the 4 to 6X range. Now here's the one thing that I'll say that's a little bit different about basketball and what we saw in COVID. The buyers created a seller backlog. think a lot of people bought basketball in 2020 and 2021 and they have been waiting for the next cycle in order to sell. That creates a backlog so that when demand starts popping up, the selling demand is already there to meet it, which means that you're not going to have big spikes, only gradual shifts upward. prices can't really break out until that supply exhausts itself. If you watch that card ladder basketball index and you see it go over the 22 K mark, but volume is going down, that's a good indicator to tell you that volume is falling and sellers have kind of shifted through their inventory. This is also something that gets printed a lot in modernity along with football. So I would say basketball is gonna be pretty sluggish as an index But there of course will be demand spikes within players, within rookies, like all indexes really have. Moving on to football really quick, which was my first love as a big Packers fan, got some bad news and some good news. We'll start with the bad news. It's only up 29 % over the year. Also good news because that's pretty good in any stock market. It's at 70 % of its all time high. That's the really bad news because it's the worst recovery of any of the categories. Another interesting thing is that it the highest volume relative to price performance. So they're selling a lot of it, but the price keeps going down. What could that tell us? What that really tells me is that we have a structural problem with football. It's not cyclical. It's pretty permanent. I think football has the most new supply entered per year. Now, I don't know if that's the case, but it really feels like that to me. There are some brands in football that they print that are just really garbage. Absolute is garbage. I'm sorry. It's just terrible. And Score also garbage. So at the end of the day, the thing about football is that demand is so specifically focused on the quarterbacks and that's where all the money is concentrated that it just flies from quarterback to quarterback. Whoever's doing well, it's Bo Nicks. Then it's Drake May. no, Patrick Mahomes got injured. Now that money has to move into Tom Brady. It's just these small little outlets where the money can go pool And no one really wants to keep money in the rookie class because everybody knows that those go down so quickly over time. Look at Jaden Daniels. He was getting invested in like he was a future Hall of Famer just because he had a good rookie year. He has a bad year now. Everybody's out. Then, of course, we're going to get post-hype sleeper. Everybody's going to be back in next year. They'll get a little bump going into the offseason. And it's just too tired. The football market is just tired when I look at it. And yes, my home's is awesome. Tom Brady is the goat actually very undervalued when it comes to a lot of his cards. But we'll get into that at another time. the supply dynamics for football are just really unhealthy. And honestly, maybe Topps coming in is going to fix all of that because back in the day in the 90s when we had Topps Chrome and in the early 2000s, football was pretty awesome. So if there's anything that I'm really looking forward to in 2026 is to see how Topps comes out with football. I'm going to be watching it closely. Alright, you guys want to talk about soccer a little bit? I know I'm not going to talk about it too much, and you know what? I'm also going to tell you where I've been wrong about soccer. Year to date, soccer is up 92%. During COVID, it had the sharpest drawdown at about 60 % of total value, had a sharp V recovery after that. And of course, it was the least liquid market, so it makes sense. Bunch of new people come in, they buy soccer, it was such a tiny market to begin with that that has an outsized effect. But a lot of people leave pretty quickly after that. There's only 28 transactions per day on these thousand cards in the index. Not a lot moving. And honestly, the way CardLadder does their indexes, some big sales that we've seen in messy rookies have outsized effect in this index. So let me tell you where I was surprised and let me tell you where I started changing things in my own investment portfolio for next year. I watched soccer really closely this year and I saw what happened. It started with Lamine Yamal a crazy breakout that went past soccer. Everybody at the national had La Mena Mall cards, so it was past the soccer market. It blew the roof off of that. Next, we went into a demand super cycle for Messi and Ronaldo. And really the soccer index became a Messi and Ronaldo index. And that's why you saw it going absolutely bananas when those two went off. Now it's retreated a little bit and it's actually become more of a healthy index because demand has cycled into Mbappe and Holland, two superstar out performers who are both on blistering paces right now. So this is true performance based movement in soccer now. So I think everything's calmed down a little bit and we're seeing more of a healthy market going into the World Cup. Now before I tell you exactly what that is and what I've decided to do about it, I want to give you a little bit more of a history Where all of this really started is when I saw that PSA had changed their ETAs and they bumped their prices up. And you know what? It made me think a lot about COVID. And in the back of my mind, I'm thinking about what other people are saying about how this is like COVID. And I wanted to see if that was right. So I went back and I looked at all of the 10 Ks and 10 Qs that Collectors Universe, the parent company of PSA, filed when they were still a public company up until 2021. And what I found told me a lot about the supply and demand economics that we're dealing with today. Before COVID, Collectors Universe that owned PSA got 69 % of their revenues from coin grading through their PCGS. They were only grading 144,000 cars per month. By Q2 2021, when they went public, cards were 65%, coins only 33%. It had flipped a 30-year-old company. Fast forward to today because what happened in 2021 was they ended up not being able to deal with the backlog and all the inventory coming in. They suspended grading. They were doing four times the volume, but their backlog just kept growing. They had to put a pause on it, broke it, which pretty much, if you think about it, is like the Fed when they raise interest rates. You can no longer get cheap capital, which means you can't really build things quickly and you can't take more risks. Same thing here. When the grader isn't giving the cards back and no longer accepting submissions, kind of hard to fuel this big boom in demand. But anyways, in 2019, we had 830,000 new graded cards coming into the market. Do know what it is in 2025? 6.5 million. 8x the slabs in only six years and they haven't had that many graders Because per their financial statements, the average grader had 14 years experience. You can't just go pluck someone off the street and make them a grader for PSA. So there isn't a lot of new skilled workers that they can put into the situation to handle all of this demand. But here they are. Six point five million cards graded per year. That's crazy. So in 2025, when they up the cost and they also tell us it's gonna take longer, that is a signal that their demand and their inventory backlog is getting larger and larger and there's only so much they can do about it. And it has stemmed the grading thirst and appetite. We've seen that about 40 % of demand has gone down in the last couple of months. Maybe there's seasonal effects there, but that's what we're seeing Via GEMRate, friend of the podcast, does amazing work when it comes to all data for sports cards. So why is this relevant? Because PSA is an indicator. They are telling us as the gatekeepers of value within the hobby right now that we're getting a massive influx of new fresh demand It's the way to leverage up into value. What is mirroring these two things in 2021 and 2025 for PSA really tell us? Well, it actually told me that supply structure determines market character. Demand is the thing that ignites the moves, but supply structure determines the duration, the depth, and the sustainability. And once I saw that, couldn't unsee it. It changed how I look at every category. and when you think about PSA nine versus PSA 10, the real difference why PSA nines have gotten knocked down so much in value is because we're grading 6.5 million cards a year. So there's so many PSA nines that that makes PSA 10 the only real scarcity factor that we have anymore for modern cards. So if you're buying a bunch of PSA nines because you think that their value is going to go up, I'm sorry. But if they're modern cards, probably not going to be the case. So guys, I talked there about volume, I talked about different sports and how that kind of moved throughout COVID and how 2025 was different because it came from the high end, filter a little bit into the mid end and at low end is almost nonexistent that we can see from indexes. So what does that tell us about the rally right now going into 2026? It's not dependent on recruiting a bunch of new people into the hobby. And in fact, it tells us that not only is Lowend not the growth driver for this rally, it's almost being ignored completely. And so if you've been watching 2025 and being like, I don't know what's happening with this rally, maybe that makes a little bit more sense. And maybe that tells you a little bit about why I'm so bullish about 2026. The analysis says that low-end and sports cards may be permanently impaired. History tells us that without a new wave of entrance, there might be no demand catalyst for that section. But what I'm doing is I'm betting on the low end. And that's what 2026 is going to be for me. I think the World Cup coming to the United States is going to mean that the average person on the street is going to know a little bit more about soccer. And I think that's going to spill over into demand in the low end when people see Messi and Ronaldo running around and doing amazing feats of human athleticism and energy is palpable throughout all of North America for such a long period of time. People are going to buy what they can afford. And it's not gonna be thousand dollar cards. It's not gonna be those fifteen hundred dollar, two thousand dollar kabooms. It's just gonna be base. It's just gonna be a silver here and there. I think those 2026 low-end people coming in are going to be collectors, So in the face of the data that says it's only happening in the high and some mid end, I think it's gonna get to the low end. And I think that's where opportunity is in the future. I think 2026 is going to be the year of the low end. I'm not telling you to follow me here. If you want to just get the rare stuff of the biggies, I think you'll do just fine. But if this thesis makes sense for you, if it makes sense with the things that you're seeing, the structural shifts and the tailwinds that you see on the macro scale. Speaking of macro, let me zoom out a little bit. Because this is where my thesis is strongest. I've been talking about soccer because that's where this thesis gets to play out and I watch most closely. But if you're in basketball, football, baseball, maybe you can think about what 2026 might look for you as well. most importantly, I want to talk to you about why the demand might be spread across all sports, not just soccer with the world cup coming. But first let's talk about billionaires because they're the ones telling us more. Kevin O'Leary launches a high-end card fund. Tom Brady buys Card Vault and starts rolling out new stores. Billionaires and institutional money are entering this space in ways we haven't seen since COVID. And here's the question people don't seem to be asking. What do they see? These aren't hobbyists who got nostalgic. These are capital allocators. They don't move into an asset class without a thesis. They had to hear something, see something, and be convinced of something within sports cards that was worth deploying serious money into. My guess? They saw the same things that we're seeing, but they saw them earlier because they have access to different rooms. They saw fanatics taking over the licensing and recognize a real operator entering into the space. They saw the World Cup coming to North America and understood what a global catalyst looks like. They saw an alternative asset thesis gaining traction. Cards as a store of value, as a hedge, They saw infrastructure being built for mainstream adoption. And they got in early. For their high-end bets to pay off, they need liquidity. They need someone to sell to. A $5 million card is pretty worthless when there's no buyer when you want to exit. So where does liquidity come from? It comes from a deep market. It comes from participation across a broad spectrum. for the billionaires to win, they need the same thing we need. They need new participants entering the hobby. They need low-end demand, creating a foundation that supports high-end prices with cumulative market effects. Think about it this way. If you're Kevin O'Leary, Mr. Wonderful, and you put $12 million into sports cards, you're not betting on high-end staying flat. You're betting on growth. You're betting that in three to five years, there are more collectors, there's more demand, and you have more liquidity. That growth doesn't come from billionaires. It comes from regular people entering the hobby. Fans who want to own a piece of their favorite player, something that they identify with. Millennials rotating out of Pokemon, casual collectors converted by fanatics marketing, which they do a really good job of. When high-end capital enters aggressively, they're not just buying cards, they're buying a thesis. They believe the participant base is going to grow and they know what the plan is to make it such. What's some other data points that make sense within this trajectory? Well, we saw Pokemon get driven to 2x all time high, but it's showing some signs of fatigue. The index has lost some steam. Attention is rotating. You see One Piece picking up, other TCGs getting looks, but millennial capital is still in motion. It's still looking for the next place to land because demand moves in cycles, windows of attention. So why sports cards? Why not just keep in TCG? Sports cards have built-in narrative engines. Every season is a new story. Every playoff run, every championship, every new breakout star, that's content, that's conversation, that's cultural relevance beyond the hobby. TCG just manufactures market through new sets and releases, but sports generate narratives just by existing. And now we have fanatics, which is the ultimate storyteller. They understand how to market to casual fans, not just hardcore collectors like Panini did. This shift is a fundamental market change of how demand is going to be pushed through the markets. Don't believe me? They proved it, Fanatics Fest. They showed that they were able to bring in the casuals, make them focus on this thing that they already loved, and then drive that demand subtly towards sports cards. showed they know how to engineer it, not by throwing it in your face, but by leading new demand where it needs to go by the hand. So I believe we see in 2026 a low end demand surge and I see it as being driven by cultural relevance and by better marketing than we saw five years ago So here's a quick summary of where I see that going in sports. For low end basketball, think about where millennials know players. Those are gonna be the guys that are going to get some capital boost if it has nowhere else to go. Personally, I think basketball doesn't have a lot of good demand indicators for me But I do believe that growth in demand is going to be brought across all sports. So there will probably be some participation within basketball. In football, unfortunately, it's a value trap within a value trap. The supply dynamics work against you in pretty much every tier. If you get some of the rare lower stuff like early Brady refractors, I think that stuff actually is pretty cheap compared to what they are, but it's just a little bit broken in how Panini has treated it. Maybe Topps Chrome brings it back. As for baseball, baseball just does what baseball does. It's the most pure collector's sport, just like it's kind of the most pure statistical sport. I have a lot of love for baseball when it really comes down to it. I think vintage is awesome. I think there are so many cool stories attached to it. And it's one of those times when men were men kind of thing. Although football has that as well way back in the day. So baseball, I think is always going to grind up higher and higher, but I don't see it as having huge demand spikes, Especially in the modern baseball market, think vintage will always just march up. Then soccer, honestly, it has the most asymmetrical risk. It could absolutely balloon when it comes to low end. It could absolutely whimper and not do a single damn thing. That's the risk. We saw it in 2021 with the V-shaped up and then back down. Certainly could happen if soccer just doesn't play in North America. People keep trying to make fetch happen. Maybe it never will. Or maybe at some point it will translate into the 52 % of the sports card market that is North America. This is as good an entry point as any, but I wouldn't be surprised if it's a very short lived time period for the soccer industry. I will say that the card design in soccer is truly amazing. Very beautiful works of art I think having tops with licensing plus panini at the same time in different tournaments has kept competition high and soccer sets value in terms of their art and their design has been kept high as well. So just another reason why it's just an awesome industry. I want to close with something that I got wrong. Because I think going into a new year is about being able to admit what you did wrong so that you can grow, you can learn from it, and you can do better in the future. For a long time, I was focusing only on low print run hyper collectible stuff. I thought scarcity was the whole game. What I didn't understand was how much sets inform demand structure. Rarity without demand is like being a starving man with a gold nugget in the desert. Time is truly your enemy in that case. You might get lucky, but probability is against you, and so is time. Scarcity without demand is just illiquidity. So we've talked about how this rally in 2025 has been different from 2020 and 2021. We've talked a little bit about PSA as an indicator and what they've told us about the supply side and the demand side. We've talked a little bit about how all of the sports have moved within their sub industries within this rally. We've talked about volume. We've talked about high end versus mid end versus low end and how they've been different. And we've talked a little bit about what 2026 could look like and what the billionaires are telling us by their own actions. So to give you the state of the hobby succinctly, 2025 has been a bull run, but it is not 2021. The underlying metrics of demand moving from the high end down instead of widely through the low end and a little bit up into the mid end and high end give us a lot more optimism for what 2026 can look like when that demand filters down into the biggest growth engine at the same time as the macroeconomic tailwinds that we have with TOPS licensing returning as well as traditional asset classes moving more into alternate asset classes uh bringing innovation everywhere and changing perspectives and breaking down traditional value systems. Thank you so much for giving the time to listen to this day of the hobby as I've been able to put it. Remember these are just my opinions informed by data, but I hope there's some things within this that were valuable to you. If so, the best thing that you can do for the podcast is to share it with a friend. If you don't want to share it with anyone, then you probably have the wrong friends. Go get some good people that you want to have these conversations with. But that being said, I hope that you had a fantastic 2025. I hope that 2026 is going to be an even better year for you and for yours. Wishing you much joy. Keep building and I'll talk to you later.