NBA Top Shot has taken a bit of a dip in user activity over the last few weeks. There have been some major news splashes with Dapper Labs (the team behind NBA Top Shot) raising over $300M, valuing the company over $2B. The investor group featured Michael Jordan, Kevin Durant, and others, an understated bullish sign that NBA Top Shot is here to stay.
Are NBA Top Shot Challenges Worth It? Yes and No!
Challenges have become a staple of activity among collectors in the NBA Top Shot community. Many have struggled to identify whether challenges should be completed. That has turned out to be a difficult question to answer for many reasons.
The first thing you need to decide is whether you are a collector or investor. An investor is going to be looking for the highest EV opportunities to put their money into. On the other hand, a collector is someone who plans on holding their moments long-term (3+ years) and does not mind losing out on EV.
I consider myself to be a bit of a hybrid. I own moments that I do not plan on selling anytime soon. Those moments mainly consist of moments from Nets players and a couple other high-end moments I believe will appreciate in the future. Participating in challenges allows me to participate and engage in the NBA Top Shot community. For every challenge I can afford, I of course am looking for the most optimal time to buy in and collect the required moments for a challenge.
Over the past month, a lot of people involved in Top Shot have taken a few steps back. Prices have plummeted from all-time highs, there is less chatter in the discord, and the euphoric hype that we saw throughout February has seemingly subsided. While some people blame challenges for encouraging people to dump their current moment, I believe that the challenges are keeping the community engaged outside of pack drops while we wait on the NBA Top Shot ‘game’ that is rumored to come later down the road.
Being involved in the Top Shot community is another way to grow your brand, learn new information, and most importantly meet new people. I have been able to make great friends and connections in the community, some of which would not have been made had I not adopted the concept of NBA Top Shot early on. Challenges can keep you in the game in what feels like a half-time.
On the other hand, investors who are strictly looking to make a profit off NBA Top Shot will need to do a lot more research into challenges. With prices steadily dropping for the past 5-6 weeks, the viability of profiting off challenges may be tougher to grasp. Check out the Seeing Stars 1 challenge that has already been completed, courtesy of OwnTheMoment.
As you can see, with the steady decline in average price, the best time to buy in the Seeing Stars 1 challenge was at the last moment—no pun intended.
There is some manual calculation that goes into determining the expected value of the challenge reward. It's a task that requires a lot of speculation and analytical work. OwnTheMoment does a great job breaking down that information for followers, and I recommend giving them a follow.
Another thing to consider when completing a challenge as an investor is that serial number will play a MAJOR part in the value of the challenge reward. For example, from the latest Holo Icon drop, the #1 serial LeBron James is valued at over $100,000. 5 figure scores are quite common when landing a #1 serial and while unlikely, is something that an investor will need to keep in mind.
For the time being, the larger number of completions in a challenge has indicated to a lower expected value of the challenge reward. Anyone looking to invest in NBA Top Shot for profit will need to be looking to complete the higher-end challenges that not many collectors can complete.
I believe the latest Tyrese Haliburton Holo Icon challenge will be completed for +EV. The maximum number of completions for the challenge is capped at 99 because the challenge requirements are /99.
With this knowledge we can assume that 20-50 people will have the capital and decide to complete the challenge. This creates one of the scarcest moments on the platform with a rookie year and rookie mint badge. Consider that a lot of people who received the challenge requirements in today’s pack drop will be looking to flip, and the Tyrese Haliburton buzzer-beating 3-pointer looks like an amazing opportunity.
As I mentioned earlier, it is critical to identify yourself as an investor or collector when considering whether to pursue an NBA Top Shot challenge. I encourage those of you with the funds to participate as they are an amazing way to stay engaged with the platform and community! Also, the sweat for a great serial number is right up there with the pack drop queue.
If you have any questions regarding NBA Top Shot challenges, feel free to reach out to me via Twitter DM: @Bobby2Nicee. Happy collecting!