In July 2021, Youtube Logan Paul spend nearly $5.3 million on an extremely rare Pikachu Illustrator Pokemon card. This is the most expensive Pokemon card ever sold, and among the most expensive trading cards in history. But what in the world could make a simple piece of printed cardboard worth such an insane amount of money? Let’s find out!

At its core, the price of pretty much anything comes down to supply and demand. This simple principle means that the price of something depends on how many people want the thing, and how many of the thing is available. If nobody wants a particular card, then it’s basically worthless – you can find boxes of individual trading cards at pretty much every hobby game store around the country selling cards for a quarter, a dime, or even a penny a piece. In order for a card’s value to increase there either needs to be higher than average demand, lower than average supply or, often, both at the same time.

First, let’s look at the supply side. The first thing to understand about the TCG market is that it’s actually two separate markets – the primary market, which consists of customers receiving the cards for the first time by buying packs, booster boxes, and sealed deck products, and the secondary market made up of hobby stores, online retailers and auction sites selling individual cards. Under normal circumstances, the primary market creates a ceiling on how expensive a particular card can be – if the price goes too high, it becomes cheaper to simply buy packs until you open the card you are looking for, rather than buying it individually. 

The exact value of this ceiling varies from game to game, but for Magic: The Gathering it’s around $400, because you need to open an average of around 100 packs to find a given mythic rare card, and each pack is around $4. However, this isn’t taking into account the value of all of the other cards you are getting when you open those packs, so in reality recently released cards tend to rise to only a fraction of this value, rarely cracking $100. Of course, this isn’t taking into account foil, alternative art, or other special versions of a particular card that can make it even more rare and boost up the price. 

However, due to the cyclical nature of most trading card games, with regular releases of new expansions, this phase doesn’t last forever. Eventually the supply of new packs in the primary market begins to dry up, and as it becomes more difficult, and eventually impossible, to find the cards you need on the primary market, their prices on the secondary market begins to go up. If demand for the cards is high enough, this process can even be expedited by scalpers who buy up the cards as soon as possible to restrict the supply, then sell them back at higher prices.

The longer a particular card has been out of print, the harder it becomes to obtain it, which can cause the price to go up. This is part of the reason why older cards tend to be the most expensive – many of the cards that were originally printed have since been lost, damaged, or destroyed.

In addition, not all trading cards are released in the same way. While most cards can be found in packs or premade decks, certain cards are given away at special events, such as tournaments or conventions, or to particular individuals, such as employees of the company. The Illustrator Pikachu card falls into this category – it was given away as a prize for an Pokemon Illustration competition in 1998, only around 40 were ever produced, and the one that Logan Paul purchased is the only one in existence that has been rated a perfect “10” by the PSA, an organization that rates the condition of trading cards. This clearly makes it an incredibly rare, even unique, object.

However, no matter what Crypto Investors might try to tell you, being inherently scarce doesn’t make something inherently valuable. There are plenty of things that are one-of-a-kind that aren’t selling for millions of dollars at auction. No matter how rare something is, it is completely worthless unless there is demand for it, and the demand for trading cards tends to come from three main places – players, collectors, and speculators.

Surprisingly, people who actually want to use the card for what it was made for – playing a trading card game – probably have the least effect when it comes to raising prices – at least, on the really high end. It’s not unusual for a particular card to be worth dozens or even a few hundred dollars purely because of its power in the game, but they rarely get higher than that. In addition, when there is extreme demand among players for a particular card, companies tend to reprint that card to make it available to more players, and if all you care about is the functionality of the card then a reprint works just as well as the original. Even the legendary “Base Set Charizard”, which has been sold for over $400,000, can be yours to play with for only around $70 bucks – if you are okay using a reprint.

However, while a player who just wants to use a particular card in their deck might be okay with a reprint, the same cannot be said for a Collector. To a collector, details such as which set a particular card came from, or how pristine its condition is, can make a huge difference in the price. Take, for example, the Black Lotus – one of the most expensive cards in Magic: The Gathering. A 1st edition Black Lotus, released in August 1993, can set you back over half a million at auction. At the same time an Unlimited Black Lotus, released only a few months later in December, only sells in the tens of thousands – still absurdly expensive, but far less than the 1st edition cards. While it’s possible that some people are actually buying these cards to use in their decks, they probably make up a small part of the market considering that Black Lotus is banned in pretty much every format except Vintage, which almost nobody actually plays. Instead, collectors are buying the cards purely for their historical value – making it similar to a rare 1st edition Comic book like Action Comics #1. 

The final category of buyers are the speculators. These buyers don’t care about the cards value as a game piece, nor its historical value, but instead purchase rare cards as an investment, in hopes that the price will go up and they will be able to sell it again at a profit. Interest in collecting trading cards grew massively during the pandemic, and this increased interest naturally drew the attention of speculators. These speculators, which range from small individual investors to major Wall-Street funds, are attracted to the high prices that they see collectors paying for rare cards, and ended up pouring millions of dollars into high-end cards over the past few years.

Of course, in order to make a profit on these massive investments, these speculators have a vested interest in ensuring that the price of the trading cards only continues to go up. They do so by further restricting supply (by buying up as many rare cards as they can), as well as attempting to further increase demand. Among the most prominent of these speculative investors is Logan Paul, who as mentioned at the top of the video bought the record breaking $5 million Pikachu card and who has been drawing attention to Pokemon Card investing for the past 2 years by making videos on the topic. Am I saying that Logan Paul’s primary goal is to use his influence to inflate the price of Pokemon cards, and cash out for a profit? No – I’m just saying that he’s a known crypto-scammer who, in the same video where he revealed his purchase of the Pikachu Illustrator card, immediately tried to monetize it by selling “shares” of the card to his fans, so you can make up your own mind.

Of course, it’s impossible for me to say whether trading card prices in general, and Pokemon card prices in particular, are actually in a bubble, or whether prices actually will go down in the near future. However, I personally don’t expect the increased interest in Trading cards (particularly as speculative assets) to continue forever, and as the pandemic-related economic forces that led to this resurgence get resolved in the next year or so 

I expect the prices to eventually drop with reduced demand. However, for now all we can really do is wait and see!

That’s all I have for today. If you enjoyed this video, make sure to give it a like, and subscribe if you want to see more TCG content in the future. And join me next week, where I will be breaking down my predictions for the future of D&D design. Until then, thank you so much for watching, and I’ll see you next time

Posted by:Caleb Compton

I am the Head Designer of Rempton Games, and primary writer for the Rempton games blog. I am currently a graduate student in computer science at Kansas State University, and work on game designs every spare moment that I can.

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