As crazy as it may sound, Pokemon in recent years has gained tremendous popularity as not just a game — but as a legitimate financial asset. Considering the current economic climate and inflationary concerns, it’s no surprise that some investors are turning to alternative assets such as Pokemon cards. However, this begs the question: how has Pokemon actually fared as a hedge against inflation? How has it fared against the broader stock market? In this article, we will analyze some historical auction data for collectible Pokemon cards (primarily vintage) and attempt to draw some conclusions.
NOTE: No part of this article should be interpreted as investment or financial advice. This information could be incomplete or inaccurate. Do your own research.
While some may snark at the idea of Pokemon cards being a legitimate investment vehicle, it’s important to acknowledge that alternative investments have been popular for decades. Collectibles such as wine, cars, art, toys, currency, and even baseball cards have been popular assets since long before Pokemon’s inception. Try answering the following question: is there any material difference between purchasing an authentic screen-worn Freddy Krueger glove and a PSA 10 First Edition Charizard?
Despite its reputation as a children’s game, it’s also important to understand just what a behemoth of a media franchise Pokemon is. By revenue, it is the most successful media franchise in the world. Perhaps the most fascinating thing about this is that Pokemon is a relatively young franchise. Being conceived only in the mid 1990s, it is significantly younger than many Disney brands such as Mickey Mouse or Winnie the Pooh.
Now that we understand the kind of media titan we are dealing with, let’s look at some numbers. According to data from auction sites like eBay, prices for vintage Pokemon cards have increased significantly since 2021. For example, a first edition Charizard card in near-mint condition was selling for around $1,500 in 2021, whereas in 2023, the price has risen to around $8,000. Let’s take a look at some other examples.
- A first edition holographic Mewtwo card in near-mint condition was selling for around $500 in 2021, whereas in 2023, the price has risen to around $2,500.
- A sealed booster box of the Base Set expansion, which contains 36 packs of cards, was selling for around $20,000 in 2021, whereas in 2023, the price has risen to around $45,000.
- A Pikachu Illustrator card, which was only awarded to winners of a Japanese art contest in 1998, was selling for around $200,000 in 2021, whereas in 2023, the price has risen to around $500,000.
Now let’s compare this with broader macroeconomic trends. According to the US Bureau of Labor Statistics, the inflation rate in 2021 was around 1.4%, whereas in 2022, it rose to around 5.4%. This means that the value of the dollar has decreased by around 6.8% over the last two years due to inflation. Over the last two years, the S&P 500 Index, which measures the performance of the 500 largest publicly traded companies in the US, has had an average annualized return of around 15%.
It’s relatively easy to see that prices for these collectibles have far outpaced the rate of inflation and the stock market. In other words, vintage Pokemon has not only been a successful hedge against inflation — but an extremely successful investment class overall.
While some are quick to chalk up this success to some sort of pandemic fueled “stimmy check” frenzy, there are several legitimate reasons for this success. Firstly, vintage Pokemon has a unique appeal as a collectible, as it represents a tangible piece of childhood memories for many individuals. This emotional attachment can drive up prices and create a strong market for these items. It should also be noted that the demand for these collectibles is not necessarily new. Pokemon has been on an upward trajectory since its inception.
However, it should be noted, not all cards have seen an increase in value.
- A Shadowless Charizard card in near-mint condition was selling for around $10,000 in 2021, whereas in 2023, the price has dropped to around $7,000. This represents a decrease in value of around 30%.
- A first edition holographic Raichu card in near-mint condition was selling for around $2,000 in 2021, whereas in 2023, the price has dropped to around $1,500. This represents a decrease in value of around 25%.
- A first edition holographic Venusaur card in near-mint condition was selling for around $2,500 in 2021, whereas in 2023, the price has dropped to around $2,000. This represents a decrease in value of around 20%.
It’s worth noting that these price drops are relatively small compared to the overall trend of rising prices for vintage Pokemon cards and collectibles. However, they serve as a reminder that there is always a degree of risk associated with any investment, and that the value of collectibles can be influenced by condition, rarity, and a myriad of other unpredictable factors.
In conclusion, vintage Pokemon cards and collectibles have fared well as a hedge against inflation over the last two years. Historical auction data from sites like eBay and forums show that prices for these assets have far outpaced the actual inflation rate, making them an attractive option for investors looking to protect their wealth in the current economic climate. While there are always risks associated with investing in collectibles, vintage Pokemon has shown itself to be a relatively stable and lucrative investment option for those who are willing to do their research and make informed decisions.