Hey there!

I've been hooked on this show called 'The King of Collectibles: The Goldin Touch' on Netflix. It's been such an eye-opener about the collectibles industry, and I've found so many interesting parallels and insights that apply to digital collectibles too.

If you haven't seen it yet, the show is all about Goldin, a top auction and collectibles house. It follows the founder, Ken Goldin, and his team as they hunt down, promote, and sell some of the most legendary items out there. Thinking about the parallels between the collectibles market and the NFT market inspired me to write a deep dive.

In this deep dive, you'll learn:

• How big is the collectibles market?

• How to market collectibles?

• How to build a collection strategically?

• Ways to control digital scarcity on the blockchain

• The added value of NFTs

Market Decipher projects that the collectibles market will attain a valuation of $628 billion by the year 2031 and potentially $1 trillion by 2033. This comprehensive analysis encompasses a wide array of items, ranging from luxury goods such as watches to trading cards, including popular franchises like Pokémon. The report incorporates NFTs into the equation.

In this chart I included NFTs next to Non-NFT collectibles. Take it with a grain of salt, as there is only one certain thing about NFTs and it is volatility. Nevertheless, art, gaming, music, media and collectible NFTs have the potential to eclipse this prediction so I consider this more of a conservative chart.

Despite a significant deceleration in NFT sales during 2023, 2024 volumes suggests a potential resurgence. It is important to highlight that prior to 2020, sales volumes remained below $100 million. Therefore, the possibility of substantial growth, particularly in emerging sectors such as gaming, cannot be dismissed.

To market collectibles successfully, Goldin employed a well-rounded approach. It all starts with the story behind each item, which is the most important element and is at the center stage. Ensuring that items are authentic and have a clear history is crucial for maintaining the brand’s reputation and protecting collectors.

Social media plays a big role, including live streams. Goldin often teams up with influencers in the collectibles community and well-known public figures, including athletes like Peyton Manning and Barry Bonds. Building personal relationships with collectors through private calls and direct emails, especially for high-end pieces, is also quite common.

They also use targeted ads and newsletters (yay!). Not everything was online, as they visited conventions and trade shows like Comic-Con.

Successful collectors on the show shared similar patterns. They all knew what they were doing and had been building their collections for years. Here are some patterns I noticed:

1. Going Niche

Zeroing in on a particular type of collectible is like getting a PhD in Nerdology.

You’ll become a wizard at knowing what’s valuable, who’s in the same boat, where to hunt for treasures, and how to predict the next big thing like a psychic with a crystal ball. How deep should you dive into this rabbit hole? Well, that’s up to how much you love it, how much time you’ve got, and how much cash you’re willing to part with. Doing this not only boosts your chances of actually completing a collection, but you might end up with something very special.

Some of the digital art segments I cover in the newsletter, like generative and AI art, are ultra niche when considering the whole collectibles market.

1. Completing Collections or Sets

Finishing a set makes a whole collection worth more. Full sets are especially appealing to buyers because they tell a complete story, give a feeling of satisfaction and saves tons of time. During the show, some sets were sold together, thus increasing their value. That's not always possible, specially with massive collections as finding a buyer might be challenging.

1. Seeking Future Pop and Cultural Items

Collecting valuable items is all about the stories behind them. Savvy collectors are always on the lookout for pieces with lasting tales. They often make early bets on what will become significant, like rookie cards of up-and-coming sports stars. Even if these players aren't household names yet, their cards can end up being worth a fortune. As time goes on, these stories gain more recognition. Take, for instance, the most prized baseball card out there—it's of Honus Wagner.

The Honus Wagner baseball card, known as the "Holy Grail" of baseball cards, is one of the most valuable and wanted sports cards ever. It was part of the T206 series made by the American Tobacco Company from 1909 to 1911. Honus Wagner, a famous shortstop for the Pittsburgh Pirates, asked to stop making his card because he didn't want to encourage kids to use tobacco. Because of this, only a few of these cards were made before they stopped production. The card is very rare, and Wagner is considered one of the best baseball players ever, making the card extremely valuable. Multiple Honus Wagner cards have sold for over $6 million at auctions or private sales.

1. Scarcity is King

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Rare finds drive up value. Culturally relevant items that are hard to find or were made in limited numbers are usually worth more. This principle applies across various fields, from antiques and collectibles to modern-day memorabilia. In the digital art space, we would consider 1/1s the ultimate scarcity symbol (there are more factors). Understanding what makes an item rare can significantly enhance your ability to make informed decisions.

Let’s take Pokémon as an example. Here, it's not always the Pikachu with the most Instagram followers that rakes in the big bucks. The true value resides in the exceptionally rare cards. The ones produced in limited quantities that test the bounds of one's patience, represent significant financial worth (Pikachu included).

Before moving on, I just want to emphasize that If the story behind a collectible doesn't become culturally relevant, at least to a group of people, scarcity is irrelevant.

There are two ways that produce scarcity when it comes to digital objects.

Organic conditions often result in a supply deficit relative to demand.

Items may become lost, forgotten, or inaccessible due to various factors, such as the owner's death or inability to access a digital wallet. Additionally, the discontinuation of marketplaces or blockchains can exacerbate this issue. Depending on the configuration of the underlying technology, the cessation of a marketplace or blockchain can lead to the permanent loss or inoperability of NFTs.

The designer purposefully constructs the system to produce scarcity.

I can think of three examples. First, a gradual cadence of generation over time, like the Nouns Daily Auction System. Second, limiting the supply, as in generative art collections. Third, burning mechanisms, such as the dynamics XCOPY employs, allowing for the 'destruction' of a 'Max Pain' to obtain a new 'Fren'.

After watching the series, I realized that NFTs and digital collectibles have benefits that might boost the value of certain items in various ways. I'd like to close this deep dive with those.

1. Even if an item becomes inaccessible for any reason, its existence on the blockchain ensures its provenance, content, and details remain available for appreciation.

2. The worth of certain collectibles can rise due to related transactions, such as the history of previous owners and past bids. Owning something that used to be owned by an important figure was mentioned in the show multiple times, and it can drive the value considerably. Keeping track of these sorts of transactions in the analog world is almost impossible, while NFTs make it simple.

3. Throughout the show, Goldin’s team dedicated significant effort to scouting potential collectibles and nurturing leads, all while navigating a landscape of uncertainty. With NFTs, tracking owners for potential deals has become remarkably straightforward. This level of tracking and transparency is challenging to achieve with physical collectibles, often requiring considerable time and expense.

4. Last but not least, the amount of time, effort, and expense involved in the authentication, transportation, and safeguarding of collectibles is clearly high. With NFTs, these three challenges are solved rather easily.

Until next time,

- Kaloh

PS - Let's connect on Farcaster, X, and Instagram.

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