Tokenized Trading Cards: The $50B Alternative Asset Class That Institutional Investors Can No Longer Ignore

The Asset Class Case

Trading cards do not resemble any conventional asset class. They produce no cash flow, pay no dividend, and occupy no place in the Capital Asset Pricing Model. Yet the 1952 Topps Mickey Mantle PSA 9 sold at Heritage Auctions in August 2022 for $12.6 million, and the PSA 10 Charizard Base Set Shadowless #4 — the canonical trophy card of the Pokémon era — peaked at $420,000 in a 2022 auction before settling to a secondary market floor above $250,000. These are not accidents. They are the output of an asset class with three fundamental economic properties that institutional investors have spent the last four years beginning to understand.

The first property is genuine scarcity. Unlike fine art, where forgery debates are endemic, or real estate, where new supply can always be constructed, graded trading cards exist in mathematically bounded populations. The PSA population report for the 1st Edition Shadowless Charizard PSA 10 shows fewer than 120 copies have ever achieved that grade from an estimated print run of several million cards. That ratio — roughly one in twenty-five thousand — is not replicated in most collectible categories. It is closer to the scarcity economics of a blue-chip diamond or a numbered proof coin than it is to the broader memorabilia market.

The second property is verifiable condition. The grading industry — dominated by PSA (Professional Sports Authenticator), Beckett Grading Services (BGS), and CGC (Certified Guaranty Company) — has created a standardised condition vocabulary that functions as a credit rating for physical objects. A PSA 10 “Gem Mint” card trades on a separate market from a PSA 9, with premiums that routinely exceed 200-500% for the most sought-after issues. This is not cosmetic: the PSA 10 Charizard trades at multiples of the PSA 9 Charizard because the supply of PSA 10s is algorithmically tighter. As of 2025, PSA had processed over 14.2 million submissions in the prior year alone — an 18.6% year-on-year increase — with population reports updated in near-real time.

The third property is cultural durability. The strongest performing card segments are not driven by pure financial speculation; they are anchored in multi-generational cultural attachment. Pokémon cards introduced in 1996 are now collected by adults who grew up with the franchise in the late 1990s, their children who engage with the current game, and a third cohort of DeFi-native investors who encountered the asset class through digital platforms. This cultural layering produces demand that is less sensitive to macroeconomic cycles than most commentators assumed during the 2022-2023 correction.

Historical Returns and the PWCC100 Framework

The only credible index covering the vintage and high-grade card market is the PWCC100, published by PWCC Marketplace — the dominant auction platform for investment-grade cards. The PWCC100 tracks the top 100 most-traded cards by historical volume, weighted by average sale price, and rebalanced annually. It is not a perfect instrument — it is illiquid, the constituents are idiosyncratic, and the trading frequency of individual cards is far lower than equity index constituents — but it represents the best available public data on the asset class’s aggregate performance.

The performance record is striking. From 2018 to the peak in March 2021, the PWCC100 gained approximately 800%. This figure requires immediate context: the starting base was low, the 2020-2021 acceleration was pandemic-driven and influenced by celebrity promotion (Logan Paul’s $200K box-break videos, Gary Vaynerchuk’s sustained advocacy), and the index composition is tilted toward the highest-quality copies of the most canonical cards — which amplifies both upside and downside. A broader market index covering mid-grade cards would show considerably lower returns and a deeper correction.

The correction that began in late 2021 and accelerated through 2022 erased 42% of the PWCC100’s peak value. The causes were multiple and mutually reinforcing: the Federal Reserve’s interest rate cycle reduced risk appetite across all speculative assets; the concurrent collapse of the crypto market — with which the card market had become culturally entwined — removed a significant demand cohort; and the market was flooded with supply as early buyers who had purchased at 2019-2020 prices attempted to monetise gains. Supply management, as in any commodity market, proved decisive.

The recovery from trough has been +63% through 2025, with the PWCC100 YTD for 2026 printing +6.3% as of February. Critically, the recovery has been led by a narrower cohort than the mania: PSA 10 copies of canonical cards (1st Edition Base Set Pokémon, 1952 Topps baseball, key rookie cards of Hall-of-Fame athletes) have recovered fully and in some cases exceeded prior peaks. Mid-grade sports cards of active players — which drove much of the 2020-2021 speculative volume — have not. This bifurcation is precisely what an asset class looks like when it matures: the speculative froth clears, and a genuine investment grade separates from the recreational market.

How Tokenization Changes the Equation

The practical barriers to institutional participation in the card market have historically been decisive. Physical custody of a $250,000 card requires climate-controlled storage, insurance with specialist underwriters, and a chain of custody that satisfies institutional compliance requirements. Fractional participation was impossible — you cannot own 0.1% of a PSA 10 Charizard the way you can own 0.1% of a share. Price discovery was opaque, driven by auction dynamics rather than continuous market pricing. And liquidity — the ability to exit a position without materially moving the market — was essentially non-existent for all but the most actively traded cards.

Tokenization addresses each of these constraints, though imperfectly. By representing a physical card as a blockchain token, a platform can enable fractional ownership, create continuous secondary market liquidity (at least in principle), publish on-chain provenance that satisfies institutional custody requirements, and automate the legal transfer of ownership without requiring physical card movement. The NFT — maligned by association with the speculative JPEG market of 2021 — is, in the context of physical asset tokenization, simply an ownership certificate with programmable properties.

The two dominant models currently operating at scale are architecturally distinct.

The Courtyard.io Model: Institutional Custody, Polygon Infrastructure

Courtyard.io, backed by Coinbase Ventures, has built what is currently the closest approximation to institutional-grade tokenized card infrastructure. The model is straightforward in concept: a user ships a graded card to Courtyard’s custodial facility (operated in partnership with Iron Mountain, the specialist records and asset management company whose standard clients include Fortune 500 corporations and government archives), the card is verified against its submitted grade and photographed using machine learning authentication, and an NFT is minted on the Polygon blockchain representing full legal ownership of the physical card.

The resulting NFT can be traded on Courtyard’s native marketplace, listed on OpenSea, or used in DeFi applications that accept Polygon NFTs as collateral. To redeem the physical card, the holder burns the NFT and requests delivery, at which point Courtyard ships the card from Iron Mountain custody. The entire system processes in USDC.

As of Q4 2025, Courtyard reports $48.2M in total value locked (TVL) — assets under custody in the Iron Mountain vault — across 180,000+ individual cards. The TVL figure has grown 31.4% over the prior quarter, driven primarily by Pokémon inflows. The Iron Mountain partnership is significant: it provides climate control, fire suppression, 24/7 physical security, and — critically for institutional purposes — an insurance backstop that would satisfy most alternative asset manager due diligence processes. This distinguishes Courtyard from many earlier entrants who used generic storage facilities.

The Coinbase Ventures backing carries strategic weight beyond the balance sheet. Coinbase’s regulatory posture — the company has been more aggressive than any other major crypto firm in engaging with US financial regulators — provides Courtyard with access to compliance expertise and, arguably, a degree of implicit regulatory credibility that purely crypto-native platforms cannot replicate. Whether that credibility will prove sufficient as the SEC’s scrutiny of NFT platforms intensifies is a question addressed in detail in our SEC NFT guidance analysis.

The Polygon choice reflects practical engineering: gas fees on Ethereum mainnet would render $50 card trades economically nonsensical. Polygon’s proof-of-stake architecture offers transaction costs measured in fractions of a cent, with sufficient security for assets in this value range. The tradeoff — Polygon is not Ethereum mainnet in terms of validator decentralisation — is one that the market has accepted for now. See our full Courtyard.io platform review for a deep technical analysis.

The Alt.com Model: Price Intelligence and Card Finance

Alt.com, the Los Angeles-based collectibles platform that secured a $100M Series B from Tiger Global in 2021, operates a different strategy. Rather than building its own custody infrastructure from scratch, Alt has focused on three related services: a price guide (the Alt Price Index, which provides estimated market values for graded cards based on recent comparable sales), a secure vault service, and — most distinctively — a card loan product that allows collectors to borrow against the value of their graded cards.

The loan product is the most structurally interesting innovation in the space. A collector with a $50,000 PSA 10 Gem Mint card can, through Alt, pledge that card as collateral and receive a loan — typically at loan-to-value ratios of 50-70% — without selling the asset. This is precisely how art finance and high-end wine finance work, and its arrival in the card market signals a maturation that purely digital platforms cannot yet replicate. Tiger Global’s investment was not a bet on JPEGs; it was a bet on the institutionalisation of card finance as a lending category.

The Alt Price Guide has become the de facto data layer for the market, providing price transparency that was previously available only to experienced auction participants. This data infrastructure is arguably more valuable to the long-term institutionalisation of the asset class than any individual custody solution — you cannot run a loan book without credible pricing, and you cannot build institutional investor confidence without continuous mark-to-market capability.

Exhibit 1: Card Category Returns by Period

Risk Factors

No institutional analysis of this asset class is complete without a rigorous treatment of the risks, which are substantial and in some cases poorly understood even by sophisticated market participants.

Illiquidity and price discovery failure. The card market is not liquid in any meaningful sense for most positions. The PWCC100’s most active constituents — cards that trade dozens of times per year — are exceptional. A PSA 10 Charizard may trade several times a month; a PSA 10 copy of a 1997 Pokémon Japanese Promo card with 40 known copies may trade once per year. Tokenization provides a marketplace, but marketplace existence does not guarantee buyers. Investors who equate a liquid NFT wrapper with a liquid underlying asset are making a category error.

Grade disputes and population inflation. PSA’s grading standards have been subject to documented criticism, including evidence that the company’s grading consistency has varied across submission cohorts. More structurally, as the volume of submissions has increased — 14.2 million in 2025 alone — the question of whether grading standards are being maintained uniformly becomes material. Population inflation (new high-grade copies entering the market as previously ungraded cards are submitted) is a real supply risk, particularly for cards where the population is small and the market price is driven by scarcity perception.

Market manipulation risk. The card market is substantially less regulated than securities markets, and wash trading — the practice of engineering artificial price discovery by having related parties trade cards between accounts — is difficult to detect and prosecute. Several high-profile auction results that established price records have been subsequently questioned. Tokenization may actually exacerbate this risk by reducing transaction friction and enabling on-chain wash trading across jurisdictions.

Platform custody risk. For investors holding tokenized cards through platforms like Courtyard, the question of what happens if the platform ceases operations is non-trivial. The NFT represents a claim on the physical card, but enforcing that claim against a company in administration requires legal standing in the relevant jurisdiction. Iron Mountain’s involvement provides physical asset protection, but does not resolve the contractual claim question. Dibbs — the fractional card ownership platform — ceased operations in 2023, providing a live case study in platform failure. Its shutdown highlighted the gap between theoretical NFT ownership rights and practical asset recovery.

Regulatory uncertainty. The SEC’s enforcement actions against NFT issuers in 2023 — particularly the $6.1M settlement with Impact Theory — create genuine ambiguity for fractional card ownership platforms. Fractional NFTs, by definition, distribute ownership of a single high-value asset across multiple holders, creating economics that the SEC has argued resemble securities. This is examined in depth in our SEC NFT guidance analysis.

Tax Treatment

The US tax treatment of trading cards held as collectibles is materially less favourable than treatment of most other investment assets, and investors who have come to the market from equities or real estate are frequently surprised by the liability profile.

Under current IRS guidance, collectibles — a category that explicitly includes trading cards, coins, stamps, and works of art — held for more than one year are subject to a maximum capital gains rate of 28%, compared to the 20% maximum rate applicable to long-term capital gains on equities. For investors in the top marginal income bracket, this creates a 8-percentage-point spread relative to equity investing — not trivial over a multi-year holding period. Short-term gains (cards held less than one year) are taxed as ordinary income, meaning rates up to 37% at the federal level.

The tax treatment of tokenized cards adds complexity. The IRS has treated NFTs as property since its 2014 virtual currency guidance and has not issued specific NFT guidance to date, creating ambiguity in two areas. First, it is unclear whether the NFT itself — as distinct from the underlying physical card — is subject to the 28% collectibles rate or the standard capital gains rate. The IRS has issued FAQs suggesting that NFTs which represent collectibles may themselves be treated as collectibles, which would preserve the 28% rate. Second, the mechanics of tokenization may create taxable events at the point of vault deposit (if treated as a sale of the physical card in exchange for an NFT) — a position that platforms actively contest but that remains unsettled.

Investors should consult qualified tax counsel before establishing positions. The IRS guidance on digital assets is a useful starting point but is not definitive on the collectibles question.

State tax treatment varies considerably. California, for instance, imposes a 13.3% state capital gains rate that applies on top of federal liability. For a California-resident investor realising a $1M gain on a vintage Pokémon card, the combined federal and state effective rate approaches 37% for long-term positions — substantially eroding the after-tax return.

Portfolio Allocation Framework

The question of what role, if any, trading cards should play in an institutional or high-net-worth portfolio is genuinely complex, and the honest answer is that the evidence base is thin. The asset class has existed in its current institutionalised form for fewer than ten years, the data is largely sourced from platforms with commercial interests, and the correlation structure is imperfectly understood.

What can be said with confidence is this. The correlation between the PWCC100 and the S&P 500 through the 2020-2022 period was positive — both rose sharply in 2020-2021 and fell in 2022 — which is precisely what you would expect from an asset class that attracted significant retail capital during a period of broad financial speculation. This is not diversification; it is correlated risk. However, the correlation in the prior period (2015-2019) was substantially lower, suggesting that the 2020-2022 episode was a regime change driven by retail flow rather than a permanent structural relationship.

The case for a small allocation — 1-3% of a portfolio for which the investor has long-horizon patience, specialist expertise, and access to institutional-quality storage — rests on three pillars. First, the scarcity economics of top-grade vintage material are genuinely distinct from equity markets. Second, the cultural durability of the strongest franchises (Pokémon, baseball’s canonical players) suggests demand persistence over generational timescales. Third, and most practically, the emergence of tokenization infrastructure has reduced the participation barrier for investors who lack the operational capability to manage physical collectibles.

For most institutional allocators, however, the more relevant question is whether the tokenization of cards as a technology platform — the infrastructure being built by Courtyard, Alt, and their successors — represents investable exposure to a structural shift in how physical assets are owned and traded. That question sits closer to the fintech allocation category than to the alternative assets category, and it is where the more interesting institutional conversation is currently occurring. The PWCC100 Index tracker provides ongoing data for those following the market.

The Outlook: $72B by 2030

The consensus market size projection of $72B by 2030 — from a $50.4B base in 2025 — is premised on three assumptions: that the demographic wave of Millennial and Gen-Z collectors continues to mature into the asset class as earning power increases; that tokenization infrastructure reduces participation friction sufficiently to capture institutional allocation that is currently impossible to execute; and that the card manufacturers — Pokémon Company International, Panini, Fanatics (which acquired Topps’ trading card license in 2022) — do not dilute their products into irrelevance through supply expansion.

The third assumption is the most fragile. The Pokémon Company has historically been disciplined about print run management; Fanatics’ entry into the sports card market is more uncertain. If Fanatics prioritises volume over scarcity in its Topps product lines, the investment case for modern sports cards weakens considerably. Vintage material — by definition immune to new supply — is a structural beneficiary of any supply discipline failure in the modern market.

The tokenization trajectory is not guaranteed. It depends on regulatory clarity that does not currently exist, on platform stability that Dibbs’s failure demonstrated is not assured, and on the willingness of the Pokémon community — currently the dominant force in the tokenized card market — to fully migrate from physical card trading to on-chain ownership. Community adoption, more than any technical or legal factor, will determine the pace of the market’s digital transition.

For investors with the patience, expertise, and appropriate infrastructure, the asset class offers genuine portfolio characteristics unavailable elsewhere. For everyone else, the tokenization platforms are building the intermediary infrastructure that may eventually make access feasible at scale — and that infrastructure story, independent of the cards themselves, is increasingly worth watching.

Donovan Vanderbilt is the founder of The Vanderbilt Portfolio AG, Zurich. This analysis is for informational purposes only and does not constitute investment advice. Collectibles investments involve significant risk of loss.