The $80 Floor: What Happens When Bulk Card Grading Dies

Grading built this market. Grading is now changing again.

This episode traces card grading from the 1990s, when buyers and sellers eyeballed condition and negotiated it live, through the trust-building years of the mid 2010s, into the COVID volume surge that turned grading into the backbone of an asset class. We cover what old label standards mean for the population data you rely on today, and why PSA 10 counts across sports and TCG look nothing like they did in 2020.

From there we get into the squeeze. Bulk and value submission tiers are closing across the major graders. We work through what an $80 per card floor does to submission math, how lock-up time factors into grading ROI, and which cards stop making sense to send at all.

The back half covers what each grade actually represents. PSA 10, BGS 9.5 True Gem, BGS 10 Pristine, Black Label, CGC 10 Pristine, and where TAG sits. Vintage centering versus ultra modern parallels. Then three predictions on where grade premiums move next.

Topics: card grading history, PSA population inflation, bulk submission shutdown, grading cost thresholds, repackers and breakers, institutional capital in collectibles, BGS Black Label, CGC 10 Pristine, TAG accuracy, Pokemon and ultra modern grading, PSA 9 versus PSA 10 ratios.

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Transcript

SPEAKER_00 0:12

In the world of sports cards and TCG, things are changing faster than ever before. The institutionalization of cards is what is driving the force of most of the investment within the space. On the one hand, the biggest driver of many of the gains of high end cards is the institutionalization of high end cards. Operating simultaneously is the collecting appetite that really launched cards as a market itself. Today we're going to dive into the evolution of grading from the history until the current day, what the future might hold, and how we can really understand how these changes are happening around us in real time. Before we begin, if you're on Spotify, Apple Podcasts, or on YouTube, make sure that you're subscribed so that you can follow along with any videos I put out, I put them out every week. Now diving into the history is where we're going to get some kind of anchor, some kind of standard of comparison with the market that we have now with what's happened before. Historically speaking, grading really didn't start until the nineties. Before then, when people were comparing cards and buying and selling, they were eyeballing condition, and in order to make the purchases and sales, the buyers and sellers really had to agree upon the condition together. This was of course before the internet, so all of the things would happen live at trade shows or in personal meetups. As the world moved into the information age in the 2000s, grading levels started to slowly rise. Yet still, card enthusiasts were very hesitant to make purchases online. Similar to Bitcoin when it first started, adoption rates are always going to be slow at the onset. People still wanted to feel a card in their hands, they wanted to see it themselves, live and in person. In a word, trust really hadn't been developed yet in the marketplace. In the mid-2010s is when we really start seeing a stirrup of card activity online. Most of the comps that you go and see in card letter are going to be at oldest 2014, 2015, somewhere in that range. You might see some 2008 here and there, but very rare. Most of those sales took place on places like Heritage or the old PWCC marketplace, which is now Fanatics. These marketplaces, auction houses already had the trust that was needed for people to be able to make these purchases and sales. At this point in the mid 2010s, this is when trust started to build, and this is when adoption rates started to spike. We all know that everything went bonkers in COVID, but there were many years leading up to that where trust was still being built in the marketplace. And the confluence of factors that involved COVID, which have been covered by many, many people, creators, and just people on blogs, normally highlight the same factors. The rise of influencers happened, which drove a lot of eyeballs where they needed to go, hype culture became more and more prevalent, surplus put some money in people's pocket, and the general lack of identity and uncertainty that happened during COVID, all of these factors together made for the crazy COVID runup. I've spoken extensively in other videos about why that was different from now, so make sure to check those out. I'll put one at the end of this video for you. But we're not dealing with that here. One massive side effect, or you could say symptom of this whole explosion during COVID though, was the rise of grading to establish markers that would make things less subjective and more objective. Remember, until then people were eyeballing things and trying to agree upon a condition. But for a market to truly explode, you need everyone to be able to agree on prices and values. Google's like Card Ladder at this time rose up, and they provided search history and comps for people that were looking for some sort of source of truth. It was grading that was the real key. Now one huge caveat to agree upon here, everyone's going to tell you to buy the card, not the grade. I'm sure you've heard this as much as I have. And at the time when grading was really in its infancy in terms of total value of the market, this was really sage advice. Add to that situation that PSA at the time was dealing with cards that weren't really valued. So for them, dealing with this card grading thing wasn't high priority or a high ticket item. I even went over this last December when I talked about how PSA was actually a coin grading company to start. The majority of their revenues were from coin grading up until 2020. 2020 was truly the explosion of grading for PSA and for Beckett, which at that time Beckett was the leading grader. And the massive volume surge that accompanied the COVID era created the first true asset backed situation for TCG and for sports cards simultaneously. We all know sports cards have a much longer history, especially baseball. But grading wise, they've all really had the same history. As a side note for you, if you've been following along or just getting into slabnomics and trying to understand what things mean sometimes, old label PSAs from this time period and soon after are generally accepted to be not as rigorous in terms of their grading standards as they are today. This has a lot to do with how much cheaper grading was back then. They didn't have the same standards. I've talked about this at length before, but at that time the market prices were really skyrocketing on pretty common cards. We're talking about base rookies for Lukadonchik and Zion Williamson, as well as the iconic cards that we know today going back to Michael Jordan's Fleer eighty six rookie, and everything in between, and older. If you go look at the values for these in PSA tens, you'll see sky high prices because there just wasn't that much supply on the market at the time. And today looking back at these cards, we're surprised and shocked. But one factor people miss a lot in this era is that there just weren't as many PSA tens as there are now. The inflation of the number of PSA tens across all submarkets, sports and TCG alike, has been truly massive. So when you look at those prices before, there were generally much less population than there is now for those cards. After COVID, everything took a total fall. Many cards lost as much as 70%, and many cards have never recovered since. Fast forward to January 2025. This is what I call the start of the AI bull market for cards. What had begun during COVID that a lot of people gloss over is the institutionalization of cards as assets. We saw many funds that were arising during this time and many tools that tried to mimic equity-like situations for these cards as assets. A good example comes to mind of Rally, which would hold an asset, say a Charizard PSA 10 first edition, hollow, and it would then issue fractional shares of ownership for anyone that wanted to buy into that asset. You could own one one hundredth of one of those cards if you wanted. They would then seek to only sell the card if a majority voted. And this was something very popular at the time. Harkening back to that rally example, that created stock market like indexes. And what we're seeing now in the AI wave is more advanced asset backed securities like funds that are organized specifically for alternative assets, even funds created by the likes of Mr. Wonderful, Kevin O'Leary of Shark Tank Fame. And we're seeing many more celebrities with name cachet like Tom Brady enter the space. Before I give you the next thing that's happening right now that's almost as important, make sure to like this video on whatever platform you are, that really helps the channel. Thanks a lot. And many gains that we're seeing in the AID bull market are indeed thanks to repackers. Repackers and breakers. The main manufacturers, Thompson Banini, have long understood that there's a gambling itch that's going to be scratched in the past five or six years. And we've seen the manufacturers do things like up the number of parallels, create case hits as a chase, and create new types of rarities for people to go after. These manufacturers are very cognizant of what people want and what the psychology is behind what they're chasing. Similarly, the rise of breakers and repackers is no mistake, but is the logical progression of how supply is put forth into the masses. As pull rates for chase cards got worse and worse, breakers got more and more powerful, as people wanted the ability, the chance to be able to pull one of those, but didn't want to make the full investment into buying a hobby box or a booster box. The logical next step was Repackers, who gave you a checklist where you weren't going to get absolutely burned on the low end, and you still had some upside to grab that top chase card. Now, why is this important when we're talking about grading? Repackers have caused most of the population to be swallowed up in this endeavor. What was once a collection appetite or a completionist appetite for people wanting to complete sets or collect the players or teams they liked has migrated more into the legalized gambling aspect that the stock market has also taken a hold of. Think of Robin Hood coming to the market for stocks and how that changed the game with their bright colors and their knowledge of psychological triggers. Profit has become a game, and this is one game where institutional money is flowing into heavily. Because repackers are swallowing up all these slabs, and you may have heard this become very prevalent at card shows that you're at, where these repackers are actually paying people to go out and buy all the slabs they can find at certain price points, swallow them all up so that they can source these out to their willing customers. So grading has legitimized supply. And that brings us into our current phase. A phase where most of the graders are shutting down their bulk submission tiers. The most recent grader to do this was Beckett, who in the last ten days or so has shut down any tier below seventy nine ninety nine a card. As we all know, I'm sure PSA did this months ago. But what you might not know is that tag did the same thing recently. For the collectors, for those just trying to get nice labs to have their cards in, this really only leaves CGC as an option. That's not cost prohibitive. CGC is the only one of the top four graders that currently has the bulk submission available, and I don't anticipate that lasting for much longer. If there's one thing I've talked about till I'm blue in the face, it's that demand cascades down. First it starts with PSA, they shut down, then it goes to Tag, they shut down, goes to Beckett, shut down, CGC's the last one, they will be absolutely hammered with demand. So anticipating that value tiers and bulk tiers are actually going to be out of commission for the next six months, maybe a year, where's that going to leave us if and when it does happen? If it costs you $80 to grade any card, what cards can still be graded? Logically speaking, the potential for profit if you're paying $80 for a card for the chance to get a 10, is going to be dependent on what a raw card is, a PSA 9 is, and a PSA 10 is, or any of the other grades that you choose with the other graders. A lot of people will look at BGS as a foil for that because they do have the 9.5, which does command pretty decent values these days. But using PSA as an example, if my raw card is $400 and my PSA 9 might be $500, but a PSA 10 is $1,000, is that worth going for a grade? Maybe, but there's one factor I didn't talk about yet. Time. If you had to wait two weeks to realize a net gain of about four hundred dollars, it would make a lot of sense. But if you have to wait three months, sometimes four months to get that card back and realize that gain, at a time where things are shifting quickly and constantly, more and more people are gonna see that not make sense. So in terms of collector demand, we're going to see that grind to a standstill in terms of supply coming in. Cards that are five hundred bucks and under in a PSA 10 are probably not going to be submitted anymore for a while. Same with BGS and tag. CGC will still gobble up some of the low end until that shuts down too. But the high end will continue in their grade. Because honestly, the market environment that we have right now is very conducive to collectibles continuing to rise. AI is creating more and more efficiencies, which is why I labeled it the AI bull run. Forecasts for GDP, which is the global domestic product, a measure of total overall economic activity, are going to rise because we're going to get more and more operational efficiency in existing businesses. This is going to drive lower overhead, which is going to increase corporate profits and make them able to put out more products, more services, et cetera, et cetera, boosting the overall economy. The effects of this could be more massive than you truly realize. Especially in the United States, where we are the origin of a lot of the AI companies with Silicon Valley. Now that we've gone over the current status of everything, here's some predictions for you. First, I think the PSA nine to ten ratio in most of the cards that are lower value are going to actually come closer together. Because there's going to be less slabs available for these in the next coming year, we're probably going to see PSA nines go up more. Another reason for this as well is because the PSA nine to ten ratio is mostly driven by population. If there's a whole lot of PSA 10s, and there's even more PSA 9s, people that want to have that card are probably just going to go for the 10 and not worry too much about the 9. Historically that's been the case over the past year and a half. But as we've seen those 10 values go up, another important thing to remember is that people get priced out of those PSA 10s. And at a certain level, when the PSA 10s are too expensive, people start looking for the PSA 9s. This is another reason why the PSA 9s keep boosting up right now, and a lot of the PSA 9s are outperforming PSA 10s, as I talked about in one of my most previous videos. Second prediction for you around this is that I don't believe that PSA 10s are going to go up that much more. They're not going to climb as steadily as we've seen recently. This is because of the bifurcation of the grading pass. We're going to continue to see PSA 10s up their populations, but PSA 9s are probably going to be pretty consistent, at least in the high value cards. The third prediction, and this one is going to be the most practical for you, is that I believe especially in Pokemon, we're going to see CGC 10 pristines go up in value compared to the PSA 10 counterparts. Historically, these are pretty equal, but people are going to be forced to become more and more comfortable with CGC because it's the only grader available right now. And the longer that situation lasts, the fact that people can only send to CGC at lower levels, the longer that people are going to be forced to like CGC more. And at the end of the day, among the major graders, they're all inconsistent, they all take too long, and buying and selling them should be based off of personal preference for the slabs. Now you might start yelling at me, tag tag, tag, but many videos on YouTube have shown via resubmissions that many tag grades are not that accurate. And in fact, they're probably the same as resubmitting to PSA a lot of the time. I've got nothing against tag, but I just think that trying to call them the most accurate grader is probably a little bit far fetched with where they are now. Who knows what the future may hold? Springboarding off that thought about CGC 10 pristines, I want to talk a little bit more about graders specifically and what they actually mean when you look at their slaps. As I mentioned before, grading when it first started was really just a differentiation. It allowed people to say, well, this is a PSA five, so it's better than the PSA four. And if you start thinking about vintage and you say, Matt, centering is more important, I'm gonna 100% agree with you. So that's my first biggest caveat, is that when you look at vintage, especially baseball, the centering is so important because that was the thing that was off in most of the sets, and that's the thing that the eye recognizes first. Centering is the most important thing in grading. I've seen PSA threes that I like a lot more than PSA sixes because of centering. But in the modern age where centering is not as big of an issue, it's still important, and it makes sense that PSA will drive down a grade just based off of being off centered by a little bit. But in this ultramodern age where there's so many parallels, so many grades, and just overall so much population, I think the real defining differentiator is going to end up being the grader that the slab is in. For the past three years, people have been PSA obsessed. So let's start with PSA. PSA tells you that they give you the highest values on the card. That's their mantra, that's their selling point. And for this time period that's been true. But remember before that, a BGS nine five in a lot of cases was worth more than a PSA ten. Things change. They're constantly in flux, so don't expect that PSA ten is going to remain king forever. PSA ten right now for ultra modern has shifted from being the standard to what I believe is the acceptable perfection. PSA nine has become a lottery ticket that didn't cash. PSA 9 has been thrown into the ditch. Anything below that, that's not a 101. People generally see as almost trash to be thrown out if it's a popular card. They want to get it out as soon as possible. Remember before I move on to BGS that this is all on ultramodern cards. Things get different because the gem rates early on were so different. And this is a massive thing to highlight. PSA 10 represents the pinnacle, right? In an iconic card that so many people want, having the PSA 10 is worth so much more than the PSA 9, because having the PSA 9 is like good but not good enough. Unless the card is expensive. Then as you go down the grades, it becomes more and more good enough the lower you go. Take a 1952 Mickey mantle, and a PSA 1 is good enough. The grades and the graders are thus most important to think about in terms of what they represent, not just what that number is on the label. And that critical idea is so important with one of the things I'm most excited about, which is where Beckett is going. Now let me first say that I've had a lot of dealings with Beckett, and there's a lot of things they need to clean up. But one thing that cannot be denied is that a Beckett 10 black label is the pinnacle of grading. Of course there are going to be examples where they miss something, but a Beckett 10 black label is considered to be the most perfect example of that specific card. In cards that are iconic, that have a massive market base, having that black label on there is going to get you a force multiplier that is so incredibly valuable. The more demand rises for that specific card, the more the black label multiple goes up. I think we all understand that one pretty well. But I think the biggest thing that you can take away from this is that Beckett 10 pristine is something that is very undervalued by the market, and the market is starting to catch up to this one. In many cases, you can get a 10P for less than an actual PSA 10, or just slightly above it in terms of the premium. But the standards for grading for getting a 10 pristine are so much higher than a PSA 10, because a PSA 10 actually exists within the 9 to 5 to 10 range. If PSA is looking at things and they use their proprietary measures to look at what the centering, edges, surface, and corners grade out to, which I'm not sure that's how they do it, but if they do, if it gets a nine five, they can either round it up to a 10 or they can round it down to a nine. That's the thing about a PSA. So within the volume of PSA tens, you're going to have some nine fives. And if they miss something, you might have a nine or a nine two five in there. But at Beckett, someone had to actually slap the 10 pristine on there. They had to say this is better than a nine five, and it's not quite the black label. Having those more rigorous values for tiers is in my opinion going to result in more accurate grading overall. A 10 pristine in Beckett thus deserves to have more of a value multiplier than a PSA 10. And you see a lot of times a Beckett 9.5 true gem be at 70% or 65% of a PSA 10. Even though a lot of PSA 10s would be Beckett 9.5s and a true gem or even have a min gem on there with a 9 on the subs. True gem meaning a 9.5 across all the different subgrades for Beckett. But a 10 pristine for BGS is above that. And in the long term, the more institutionalized money comes in and the more they run actual numbers and data feeds through their algorithms, the more this is going to become prevalent, the more these cards will be targeted. So I talked about what PSA grades look like. Beckett grades, if you're at a 10 black level pristine, you're at the pinnacle of grading. A 10 pristine is going to be a beautiful, beautiful card that is above a PSA 10 to me. And a 9.5 honestly is at or around what a PSA 10 is. BGS 9s as well tend to be undersold compared to PSA 10s, but the more people normalize and dig in their heels on saying a BGS9 and a PSA 9 are pretty much the same, the more we should see those values stabilize against each other. The market overcorrected with PSA versus Beckett, and I think it's going to overcorrect the other way for a time. And think of when people are sending in cards to get graded. If it's me and I really believe this card can get a 10 pristine or a black label, I'm sending off to Beckett, not PSA. So the most perfect cards are actually going to find their way to Beckett over time. If Beckett can clean up their customer, Customer service and their operational efficiency, they should become the dominant grader and they should have the grails that are associated with cards, especially for any card that you've seen and love. If there's not a lot of demand for the card, then it's not going to matter as much. So if PSA loses their whole value is our big thing, and Beckett becomes the most important grader in terms of the high end, then where's CGC and tag going to fall? Especially CGC with the 10 pristine. I think this is another thing that's very undervalued by people looking long term. Similar to that Beckett 10P, a 10 pristine in CGC means that it went above the 10. A grader looked at it and said, no, this actually applies to be better than our base 10. The base 10, which is in no way comparable in terms of value with a PSA 10. CGC 10s a lot of the time will sell for maybe 10% more than a PSA 10, and maybe 10% under, somewhere in that range is what I've seen a lot of the time. But I think those 10 pristines might get a big bump. And those flatons live in this weird world where they're perfect but not perfect at all. Unlike PSA, who doesn't have a higher tier, CGC does. So those tens are not real tens, I think, in many people's eyes. And I think the market wisely deduces such and doesn't value them so. So CGC is almost taking over as the budget PSA. This is what SGC did for a little bit before PSA bought them and effectively boutique closed them. But as I talked about earlier in this video, the longer CGC is able to keep their value and bulk going, the more market share they're going to grab from PSA. So I could definitely see CGC become the standard for any cards that are below about 500 bucks in a 10. The market takes some time to acclimate, but then it does catch up quickly. And they're just going to become more affordable, especially for the people that collect, which is something that PSA is almost pricing out of the people using their grading service. And repackers like PSA too. I think that drives home the thesis even more. Repackers are going to do PSA for a while, PSA is going to lose some of its sterling reputation, and things are going to move more into CGC. Where does that leave tag, which everyone wants to hold up as the most accurate grader? Take a little dive on YouTube if you don't believe me, but many times people do resubmissions through other accounts and they find that tag doesn't have the most accurate grades. You'll see grades go up a point, sometimes a point and a half, sometimes an eight becomes a ten. And if you're using AI grading that scans everything the same way every time, that's impossible. Of course there's human error, but I've seen many of these regradings happen enough to think I don't really know what's going on at tag, and I feel like a lot of us feel that way. Tag enthusiasts are of course going to think it's the best because you can offload any kind of human error, but there is human error still happening. And that's well documented at this point. So tag's a maverick. It definitely has some powerful people behind it and a lot of money, and maybe at some point they'll make it so that the grading is ironclad. If that ever happens, then I do believe that tag may take over as the single source of truth in grading. But until we get evidence of that and are shown transparently how that will happen, people are going to still try and find cracks. And if you're an AI grader, you can't have cracks. So in summary, we've come a long way since we are eyeballing cards for values. Setting standardized values and grades is what's allowed this market to really pop up and get a lot more activity flowing in in terms of how the supply and demand are moved around. As things continue to shift in this current economic climate, we need to understand ways that that can play out in the future, and we need to be able to maneuver within those ways. There's a phrase that I love adapt or die, and I think this is really relevant within cards. Understanding that PSA dominance won't last forever and is already giving way to the higher level gradings through black label and 10 Ps, as well as the fact that CGC is going to take a lot of their market share in the lower end, means that I think we're at one of those inflection points for change. But what are your thoughts on this? What are you seeing out at card shows? What are your friends telling you? How are people starting to change in how they communicate and refer to things? Feel free to leave a comment on this video if you're on YouTube or go on over to Slabnomics at Instagram. Always love to hear what you guys think about this stuff. That's it for me today. If you enjoyed this talk about grading, I am going to put another video for you here, which is going to go into it even more, a past one that I've gone over elements like this. I hope you enjoyed it. And as always, keep building and I will talk to you later.