Cool, so that means Julian Reese, the brother to WNBA superstar Angel Reese, has signed an Exhibit 10 deal with the Lakers. Cue the hype machine, right? Particularly in the free-for-all environment of this new wild west that is sports crypto and NFTs. Now hold on before you FOMO into that Reese-themed meme coin or Lakers NFT.

I've spent years navigating the blockchain space, and I've seen this movie before. As is so often true, the hype of the first phase drowns out the substance of what’s next. A player signing can cause immediate short-term volatility in specific corners of the scalable crypto market. To think that this will create a permanent sports crypto bonanza is just overhyped. Think of it like this: Someone throws a pebble into a pond. You get a little bit of a ripple, okay, but not this tidal wave.

Liquidity's Limits Hinder Real Growth

The crypto market, at the end of June 2024, is in a consolidation period. Bitcoin’s battling just under $60,000, Ethereum at just under $3,350. This isn’t a bull market fueled by excess liquidity. It's more like a stagnant pool.

Think about it: a flash flood of interest in a "Reese Lakers Token" (let's pretend it exists) might pump the price briefly. When overall market liquidity is constrained, it becomes much easier for whales to manipulate these smaller markets. We are talking about pump-and-dump schemes, which result in many everyday investors being left holding the bag.

It’s as realistic as launching a rocket from a rowboat. You can achieve some startup push, but you’re not going to make it to orbit. Sustainable growth cannot happen without a firm base, and our base is crumbling. Without the money to actually purchase the coin, it’s nothing more than a bubble that pops at the first sign of pressure.

Exhibit 10: Far From Guaranteed

Let’s stop pretending that Exhibit 10 contract is a glorified one. That doesn’t mean he has a guaranteed spot on the Lakers roster. It's basically an invite to training camp. Reese has to earn his place. As written, it’s a lock he won’t make the final roster.

Now, replace whichever NFT art you bought with a Julian Reese NFT, placing your bets on his Lakers career. If he doesn’t make the team, what’s that NFT worth? Suddenly, it’s not a cool piece of Lakers history; it’s an obscure digital souvenir of a Lakers “what if.”

Hopefully, this isn’t seen as a slight on Reese’s talent or potential. Investing based on hope of success is a recipe for anxiety. That’s particularly the case when that hope is based on a not-guaranteed contract. It’s akin to betting on a horse race before the horses have left the barn. Rather, you’re operating on the level of guesswork, not analysis.

Institutional Interest? Where's the Proof?

Maybe the only thing that could provide long-term impetus to a sustainable crypto boom would be institutional investment. Think about pension funds, hedge funds, and large corporations. In addition to providing hundreds of millions of dollars in clean energy capital, these players add important legitimacy.

Are they jumping all in on sports NFTs and fan tokens? Not even close. The market’s too immature, too speculative, still. With regulatory clarity completely absent, the resulting uncertainty in the market can be devastating. They find the likelihood of extremely poor outcomes outweighs the chance of realizing extreme positives.

Consider this: institutions are built on risk management. Sports crypto, at this moment in time, is the exact opposite of that. It’s much closer to betting on the roulette wheel at a casino. Take it from an avid lottery player—yes, you can come out ahead, but it’s not a fair contest. The market is too shallow, too easily influenced, and too dependent on short term fads.

I get the allure. The dream of owning a piece of sports history, of being in the know and part of this exclusive community—all that is magical. I’m not dismissing every possible opportunity in the sports crypto space either. Data-driven trading, tracking social sentiment – these are things that can provide short-term opportunities for the quick-witted market participants.

Keep in mind, this is a frontier of high-risk, high-reward opportunities. It's not a guaranteed path to riches. Do your research. Be realistic. So don’t bet the house on Julian Reese being your next crypto millionaire. Keep in mind that any other athlete would be in the same position!