In December 2019, Memphis Grizzlies guard Ja Morant found himself one-on-one with Phoenix Suns center Aron Baynes. This was a size mismatch: Morant is 6-foot-3, and Baynes is 6-foot-10—but it was also a speed and vertical leaping mismatch. Morant blew past Baynes, leaped high above him, and put him on a poster for one of the most vicious dunks the NBA has produced in years.
The play went viral on Twitter and Instagram within minutes. In the 14 months since, people have watched it millions of times on YouTube, TV highlight shows, and everywhere else media is consumed. Most everyone who’s watched it has done so for free, other than the cost of Wi-Fi, cellphone data, or cable. You can watch below, and become viewer number zillion and one, for no charge.
On Monday night, a user identifying themselves as “Hardy” spent $100,000 on the very same highlight—not for an exclusive broadcasting license (it’s still right there on YouTube) and not to watch it in VR (it’s still just two dimensions, like every other dunk highlight). No, this person paid $100,000 to own a digital collectible, basically a crypto asset, available for trade on NBA Top Shot, a marketplace in which the NBA has partnered with the creator of the virtual cards.
In this space, basketball highlights aren’t highlights. They’re called “Moments”—but they’re really commodities like stocks, silver, or, perhaps most aptly, Bitcoin.
The $100,000 fee for Morant’s dunk is arguably not even close to the most jarring expenditure on the website, given some of the more pedestrian plays that have garnered big money. Someone paid $10,000 for a Marcus Smart layup. Someone else paid $5,499 for a Jonas Valančiūnas block. Another paid $3,185 for a nice OG Anunoby handle and two-handed dunk. Don’t forget $1,680 for a Nikola Vučević one-handed hook.
No disrespect to those players and their nice plays. But naturally, given those prices, big plays by big names sell for astronomical amounts. After the slam on Baynes, Morant went on to win Rookie of the Year. His $100,000 dunk was one of a handful of sales at that amount that traders had made on the platform by Monday night. But it wasn’t the biggest. That was a $208,000 LeBron James dunk:
👑ALL HAIL THE KING👑@YoDough scooped up this Legendary LeBron James Moment from our Cosmic Series 1 set for $208,000‼️ This Moment is from our first Legendary set ever minted 💯
The top acquisition for any NBA Top Shot Moment … so far.
Congrats on the nice pickup! 👑 pic.twitter.com/rFLMzbwXN7
— NBA Top Shot (@nba_topshot) February 22, 2021
Dapper Labs, a Vancouver-based blockchain company, launched Top Shot widely in October. Its business has seen an explosion of attention in the past few weeks. On Sunday, Ledger Insights reported sales on the platform had crossed $123 million, with about half that amount coming over the previous six days. The exact number of people trading digital highlights on Top Shot is unclear, but it appears to be thousands. Many are throwing around big money.
The whole thing is bizarre, but not as much as “paying thousands of dollars to own highlights that are already publicly available for free and can be reproduced in limitless quantities” would suggest. To the contrary, Top Shot might be a natural confluence of particular shifts that have been building for years in financial markets, the sports world, and beyond.
The Top Shot boom baffles because the highlights fetching six-figure prices seem to have very little underlying value as we’ve come to understand it. But value has always been a malleable concept, as the biggest market stories of early 2021 have emphatically demonstrated. Loosely organized retail investors on a subreddit became the driving factor in pushing a flailing video game company’s stock from $17 to $480 in a matter of weeks. A few weeks after that, Bitcoin—a decentralized online currency not issued by governments and more or less unknown to much of the world—surpassed $50,000 against the U.S. dollar. The underlying value of GameStop and Bitcoin is dubious at best, yet that hasn’t stopped them from making some people very rich, very quickly.
Small groups of actors have always been able to change the value of things, but the internet has made it easier for them to act in concert. It’s also made it possible for influential cheerleaders of certain assets to move markets by tweeting about them. In the case of GameStop, that meant r/WallStreetBets posters coalescing behind the stock. In the case of Bitcoin, that means Elon Musk tweeting up the price of a coin. (Actually, Elon Musk did that with GameStop, too. Maybe Elon Musk has a bit too much social media and financial clout.)
Top Shot fits neatly into this tradition. The NBA has a huge online following, and that doesn’t just mean the 32.4 million accounts that follow @NBA on Twitter. There’s a whole ecosystem, #NBATwitter, that serves seemingly everyone in the proximity of pro basketball. The hive mind of #NBATwitter, and the rest of the league’s sprawling social media empire, can determine the value of NBA-adjacent things. In a way, it’s not dissimilar from r/WallStreetBets hyping GME, even if #NBATwitter creates value through more complicated mechanisms than buying a stock in droves.
This corner of the internet is the primary prism through which a lot of sports fans now consume the NBA, and the only prism for some casual fans. There are not many NFL fans who tweet incessantly about football but rarely tune in for the action on Sunday. By contrast, the NBA has tried out exclusive streaming deals with Twitter to try to get more hyperactive fans on the platform to actually watch games. Most leagues are aggressive about snuffing out unlicensed accounts tweeting their highlights, but commissioner Adam Silver views those highlights as helpful to the NBA’s long-term business interests. You know: valuable.
“We analogize our strategy to snacks versus meals,” Silver said in 2018. “If we provide those snacks to our fans on a free basis, they’re still going to want to eat meals—which are our games.”
The NBA seems to have evolved on this stance—not by phasing out highlights but by leaning into them as a moneymaker in their own right. The NBA and Dapper Labs have a licensing agreement, which grants the NBA a cut of all sales on Top Shot. That makes the NBA both the creator and, to some extent, the auctioneer of these digital collectibles—or as ESPN’s Brian Windhorst put it: “not only the Picasso but also the Sotheby’s.”
Top Shot is just another platform that’s capitalized on two groups that overlap: those who have fewer places to spend disposable income and those who think they can make a quick profit.
NBA highlights that live on the internet (and that the people posting them don’t own exclusively) have been demonstrating value for more than half a decade now. A college student started House of Highlights, a mega-viral Instagram account, in 2014. Bleacher Report acquired it in 2016. The handle now has 21.5 million followers. Its founder, Omar Raja, has a million followers on TikTok and a job at ESPN.
The league’s players are also extremely online and have noticed how much value highlights hold. Some have seized on Top Shot itself as an investment opportunity. The Miami Heat’s Tyler Herro is one of several who has an advertising deal with the company and directs his 320,000 Twitter followers to buy his own Moments. The Atlanta Hawks’ Clint Capela appears to have learned about Top Shot after the first wave of his colleagues did, and he wants in.
It’s often said that the NBA has entered an era of “player empowerment,” wherein top stars exercise unusual power in charting their own futures through free agency and trade demands. Given that the players get a cut of league revenue and the NBA is in business with Top Shot, this platform might be yet another frontier into which influential players can push a marketable product. This expansion of player empowerment to an increasingly wide and esoteric variety of commercial realms has been building for a while, too.
Top Shot Moments are a lot of things. “A bubble” is probably one of them, because it’s hard to make the case that the underlying value of otherwise-free basketball highlights is anything near what collectibles on the platform are fetching. But as a hedge funder and Duke business professor told me during GameStop mania, “A bubble is just a deviation from fundamental value. A bubble can be permanent.”
Top Shot has already resulted in some sellers reaping incredible windfalls. But could it really last as the investment its believers promise it to be? Like every investment boom, it will result in some buyers losing their shirts. Certain digital cards might retain their value for a long time and create rapid riches for their owners, but most of the people who look to Top Shot for anything more than a good time will be disappointed. A five-figure Marcus Smart layup feels more or less like the subprime mortgage security of NBA fandom.
More than a bubble, though, Top Shot is what happens when an internet-obsessed fan base and an internet-savvy league collide with a world where obsessed online communities can drive rapid and hard-to-explain price movements. And where all of that collides with a pandemic.
After all, game highlights are no easier to access than high-quality photographs of players in action, and yet physical trading cards have remained a valuable business. Much like these digital cards, and stocks on Robinhood, and election betting, the pandemic has brought signs of a boom in the old-school trading card industry. Top Shot is just another platform that’s capitalized on two groups that have wide overlap: those who have fewer places to spend disposable income and those who think they can make a quick profit.
A lot of things about markets in 2021 don’t make immediate sense. See: GameStop, Bitcoin, Tesla’s rise to stock market domination despite a lack of actual market domination, and the stock market generally going wild while millions fall into poverty amid an uncertain safety net.
A lot of things about the NBA in 2021 don’t click right away either. See: the Washington Wizards running John Wall out of town and replacing him with the aging, inefficient Russell Westbrook; the Hawks’ Cam Reddish attempting five three-pointers a game despite making just 26 percent of them; and the league insisting on having an All-Star Game during a deadly pandemic against the wishes of its All-Stars, including the face of the league. But as with the Top Shot boom and its antecedents, in each of these instances, a well-placed, influential, small group of people decided that these seeming fantasies were real opportunities, and poof—they were acted upon.
The prices for Moments might not make sense. But the emergence of Top Shot makes plenty, given how the league, financial markets, and the internet have behaved leading up to this moment. In 2021, all it takes to create enormous value out of thin air is for enough people to agree on it. If anything is shocking here, it’s that it took until now for something like Top Shot to take off.
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