If Only You’d Tokenized That Ken Griffey Jr. Card
The other day I saw a startup selling fractional ownership in a pair of Air Jordans. Not the kind you lace up and wear. No—these are sealed in a vault somewhere in Delaware, probably sitting between a Picasso and a VHS copy of Jumanji.
Michael Jordan shoes range in price of $100-$250 and for this price, you too could own “one pair of sneakers.”
Welcome to the new frontier: tokenized collectibles. Sneakers, baseball cards, vinyl records, even watches. If it can be locked in a glass case, somebody is figuring out how to slice it into shares and sell it like stock.
The pitch is the same every time: We’re democratizing access to alternative assets.
It Does Look Cool
To be fair, the apps look slick. The process feels fun. You can sit on your couch and say, “Hey, I own part of a Jordan 1.”
It’s convenient. It’s novel. And if you’ve ever wished you hadn’t jammed your Ken Griffey Jr. rookie card in the spokes of your Huffy, this scratches that itch.
But it’s important to understand that many collectibles and tokenized interest do not generate ongoing income and their value may depend on market demand and resale conditions.
Vibes-Based Investing
A pair of sneakers sitting in a vault doesn’t pay rent. A Beanie Baby doesn’t throw off dividends. A VHS tape doesn’t generate revenue.
The only way your slice of a tokenized sneaker goes up in value is if somebody else wants it more tomorrow than you do today. That’s not ownership—it’s speculation.
It’s investing based on vibes.
By contrast, shares of operating companies may be supported by business revenues and earnings, and some companies may pay dividends. However, stocks can be volatile, dividends are not guaranteed, and investors can lose money.
You don’t have to hope someone comes along and bails you out at a higher price. You may purchase stock with the mindset of holding the stock and potentially gaining income.
Real Assets vs. Locked Cabinets
There are differences between collectibles and traditional investments:
- Stocks represent ownership in publicly traded companies; returns can come from price changes and, when offered, dividends – but prices and dividends can fluctuate, and losses are possible.
- Private businesses may generate revenue, but they can also be illiquid and carry business, operational, and concentration risks.
- Real estate may provide rental income and potential appreciation, but it also involves market risk, liquidity constraints, property specific risks, and expenses.
Different investments can have different roles depending on an investor’s goals, time horizon, and risk tolerance.
All of these have the potential to grow in value and produce new income along the way. Growth and yield.
Tokenization Isn’t All Bad
Now, I don’t want to sound like the cranky neighbor yelling at kids to get off his lawn. Tokenization is an interesting technology. My investment team can even show you ways to participate in the business side of tokenization—companies building the infrastructure, potentially making money from it.
That’s a different story than buying a share of a sneaker.
And here’s a question few people ask: who’s paying for the vaults? Where’s the insurance if a hurricane floods the warehouse? Surely there are fees to protect these things from theft, mold, or just plain accidents.
Remember when that sinkhole opened up under the National Corvette Museum in Kentucky and swallowed a bunch of classic Corvettes? If that can happen, what’s stopping your fractionalized Air Jordans from meeting a similar fate?
Fun vs. Foundation
Look—I get it. Buying 1/72 of a Ken Griffey Jr. rookie card might be fun. Telling your buddies you’re a co-owner of a sneaker is a great party trick.
But novelty alone may not align with long term financial goals for many investors. Because collectibles and tokenized interests may be volatile or illiquid and may not generate income, they may be less appropriate as a primary strategy for goals such as education funding or retirement income.
That’s why, call me old-fashioned, I’d rather own boring things that make money. Dividend checks from stocks. Rental income from a duplex. Cash flow from a business with real customers.
Because investor preferences and markets can change over time, it can be helpful to focus on a diversified approach that is designed to work toward tong term objectives – recognizing that results are never guaranteed.
So sure, if you want to dabble in tokenized sneakers, have some fun. But don’t forget: the real game is still owning things that generate real value.
And if you really want to tokenize something? Start with a business that earns. Tokenization as a technology is evolving, and there may be multiple ways markets participate in that ecosystem. Any approach should be evaluated based on the specific product structure, risks, costs, and an investor’s circumstances.
Evan R. Guido, Senior Wealth Advisor, is the Founder of Aksala Wealth Advisors LLC, a 2018 Forbes Top Next-Gen Advisors award recipient. Evan heads a team of financial strategists for clients who consider themselves the “Millionaire Next Door.” He can be reached at 941-500-5122 Aksala.com eguido@aksalawealth.com 6260 Lake Osprey Dr. Lakewood Ranch, FL 34240. Securities offered through Cetera Wealth Services, LLC member FINRA/SIPC. Advisory Services offered through Cetera Investment Advisers LLC, a registered investment adviser. Cetera is under separate ownership from any other named entity. The views and opinions presented in this article are those of Evan R. Guido and not of Cetera or its subsidiaries. These opinions are based on Evan’s observations and research and are not intended to predict or depict performance of any investment. These views are subject to change based on subsequent developments. Information is based on sources believed to be reliable; however, their accuracy or completeness cannot be guaranteed. These views should not be construed as a recommendation to buy or sell any securities and purely for education and entertainment. Past performance does not guarantee future results. Investments in tokenized assets are not offered through Cetera Wealth Services LLC. The Top Next Gen list includes 250 rising advisors who help manage over $490 billion in client assets. Each advisor was nominated by their firm, then vetted and ranked by SHOOK Research. The rankings, developed by SHOOK Research, are based on an algorithm of qualitative criterion, mostly gained through telephone and in-person due diligence interviews, and quantitative data. Those advisors who are considered have a minimum of four years' experience and the algorithm weighs factors like revenue trends, assets under management, compliance records, industry experience and those that encompass the highest standards of best practices. Portfolio performance is not a criterion due to varying client objectives and lack of audited data. Neither Forbes nor SHOOK receive a fee in exchange for rankings. Listing in this publication and/or award is not a guarantee of future investment success. This recognition should not be construed as an endorsement of the advisor by any client. No compensation was provided directly or indirectly by the recipient for participation or in connection with obtaining or using the third-party rating or award.