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Is This A Pokemon Card Bubble?

2020 was a unique year for one too many reasons, but among the most surprising may have been an unprecedented rise in the price of Pokemon cards. All this meant the decks of cards that were casually thrown in the playground back 1999 could now be considered by some as a real financial investment opportunity.

Of course, with prices appreciating anywhere from 300% to 1000% on a year-on-year basis, Pokemon cards have started to draw attention from people or celebrities that one wouldn’t normally relate to the franchise. However, before running off to check if you can sell your Pokemon cards to make a fortune, it’s worth knowing what exactly set off this Flare Blitz of a bull market.

The Pandemic And Social Media

Most people familiar with Pokemon know a mint grade 1st Edition Charizard is the holy grail card everyone has to own, but what caused this particular card to go from selling for $36,110.54 in December 2019 to $350,000 in its most recent auction? Well, a large part of it is down to the price movements traditional investments have been going through since then.

When the world was struck by the pandemic, financial markets all over the world sank temporarily as most industries and company stocks were faced with uncertainty for months to follow. This caused investors to flock over to what are generally considered safe haven assets in the midst of a crisis – things like gold, real estate and cold hard cash.

As certain sectors of the economy started to recover and government stimulus checks were handed out, some people suddenly found themselves with disposable income and very few places to spend it. Tourism, dining, and public entertainment were not an option, but things like the booming video game industry, stocks, and speculative investments like Bitcoin and Pokemon cards suddenly became more attractive. After all, even Fortnite is making bank on stonks.

Since then, the stock market and practically every other asset class (real estate, art, etc.) have rallied to all-time highs, meaning people profiting from those investments have more money to spend and diversify over to Pokemon. What this means is those lucky enough to be working in profitable industries eventually go to social media and YouTube to flaunt their new acquisitions.

Pokemon cards quickly became as much of a status symbol as a fancy car, with the added perk that those cardboard ‘Mons can be showcased in a Logan Paul stream without going anywhere. Simply put, Pokemon is a perfect quarantine hobby that can even net you some nice gains.

What Correlation Does Pokemon Have To Basketball, Football, And Baseball Cards?

So it’s already been established some people use their stimulus checks for rent, while others might indulge in Pokemon cards or a PS5 (if they can find one), but it turns out this phenomena is not exclusive to beloved video game icons.

2020 also saw the original trading cards completely blow up in terms of price. While only the right Blastoise card can be a Hall of Famer, Michael Jordan, LeBron James and Tom Brady have been playing the sports cards game for far longer than the Pokemon Company.

While Pokemon may have gotten a boost in popularity due to more people spending extra time at home playing games, sports fans suddenly found themselves without any events to watch or gamble on. This sudden halt to competition coincided with Netflix’s hit documentary series The Last Dance, which completely woke up people’s interest in the 90’s basketball era, also causing sports cards to climb in value earlier up to as much as a 1st edition Pokemon base set, with the Pocket Monsters closely following the trend of its spiritual collectible predecessor before surpassing it due to their perceived novelty factor.

The Simple Economics Of Pokemon Card Prices.

First thing’s first, inflation is a thing. While technological improvements allow companies to improve their cost structures, $70 games are almost a reality, and this console generation is the most expensive to date. As some people working in thriving tech industries and financial markets make more money, they’ll be looking for somewhere to put it.

Just like there’s only so much New York real estate that can be built, 1st edition Pokemon cards will never again be printed, and in both cases it’s as simple as supply and demand. Even the weakest Pokemon cards can go up in value if they’re rare, scarce or are simply unique enough. If a pristine Super Mario Bros. cartridge can sell for $660,000 then it makes sense for Logan Paul to pay millions for unopened booster packs that could potentially score him an even bigger fortune.

Grading Pokemon cards is a complicated process and there only so many vintage video game carts and Pokemon goodies because most people were too busy playing with them. Yet the same cannot be said for newer Pokemon card sets; those are being printed in bigger numbers than ever before and they’re also treated by collectors like valuable items from the moment they’re pulled out of the pack.

There will never be another 1st edition base set of Pokemon cards much in the same way no one will ever paint another Picasso. Newer TCG Pokemon sets might be better in some ways, but they’re better off being treated like the works of a living artist – anyone can buy them and the original maker can readily put out as many as they want to on a whim.

Where Could These Prices Be Headed?

Back in the late 80s and early 90s, sports fans lived through a similar boom and bust cycle to what Pokemon collectors may be experiencing right now. As the world of sports grew thanks to mass media, collectors of vintage sports items like early 1900s tobacco cards saw their prized possessions increase in value, thus prompting card makers to rev up the printing press to churn out as many cards as they could, because people were simply buying them.

This resulted in a surplus of sports cards produced between 1987 and 1997 that makes collectibles from that era practically worthless in comparison to their real vintage counterparts or even more certifiably limited modern editions. While this is pure speculation, a similar trend could follow for recent card sets released by the Pokemon Company like the GX expansions that went flying off the shelves somewhat recently.

It bears saying that collectible items like art and Pokemon cards really don’t do anything. People buy them and they just sit there looking pretty. They’re not like real estate property that can collect rent or Apple stock that produces constant dividends and cash flow because the company continues to sell iPhones. Almost every single person buying a valuable Pokemon card is doing so under the assumption that they might be able to sell it for a higher price later on.

As a word of caution though, back in the 2008 housing crisis sports cards prices fell as much as the stock market, meaning the current Pokemon card rally will most likely only be sustainable as long those stonks continue their up only trend. So when buying cheap or expensive Pikachu cards, it’s probably for the best to do it out of sheer love rather than to make a quick buck.

Next: Genshin Impact: Every Playable Character’s Age, Height, And Birthday

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Raul is an attorney and writer with a fervent passion for gaming, tech, finance and languages. He’s been in love with platformers since Super Mario World but is always looking for the next indie game that’ll capture his heart the same way Nintendo and Bitcoin did. Find him on Twitter @RaulTweet

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