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RTFKT, the innovative NFT sneaker brand acquired by Nike, is set to cease its Web3 operations by January 2025 amid significant NFT market downturns.
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Nike, under new leadership, is pivoting towards traditional retail and physical goods, as the digital asset sector increasingly falters.
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“This will probably be one of the saddest stories from the NFT space,” lamented web3 investor Rahim Mahtam, reflecting widespread community sentiment.
RTFKT is shutting down Web3 operations by January 2025 as Nike shifts focus to physical products amidst a drastic decline in the NFT market.
The NFT Decline Claims Another Victim
RTFKT’s planned closure highlights the challenging environment for NFTs; the company will host a final product showcase this month, presenting the MNLTH X featuring the Blade Drop. This symbolizes RTFKT’s ambition to merge digital and physical worlds through innovative design.
Founded in 2020, RTFKT gained attention by blending game engines, NFTs, and augmented reality, capturing the zeitgeist of digital transformation in fashion. Nike’s acquisition marked a significant commitment to digital assets during a time when many brands were investing heavily in NFTs.
Despite initial enthusiasm, the NFT market has plummeted since 2022, prompting Nike’s new CEO, Elliott Hill, to prioritize traditional revenue streams and wholesaling partnerships over digital product lines.
“The project had so much potential… it’s just sad,” Mahtam expressed, highlighting a key concern—the disconnect between NFT creators and their community.
Additionally, Nike’s recent omission of the RTFKT branding from its corporate announcements signals a definitive shift across its digital strategy.
More Firms are Exiting the Industry
Nike’s retreat from NFTs mirrors broader trends; Kraken recently decided to close its NFT marketplace, redirecting its efforts towards core financial services. The downward spiral continues, with reports indicating that a staggering 98% of NFT collections experienced negligible trading activity in 2024, and most projects have seen rapid depreciation.
The grim outlook shows that only 0.2% of NFT projects are currently yielding profits, exposing a market plagued by oversaturation and speculative investments.
NFT Monthly Trading Volume from 2023 to 2024. Source: Dune
Despite the bleak landscape, some recent ventures have ignited hope; FIFA announced a collaboration with Mythical Games to create a mobile NFT football game, suggesting ongoing interest in the digital asset realm. Furthermore, notable figures within the Ethereum community, such as Vitalik Buterin, remain engaged with NFT projects, evident in recent NFT minting activities.
The overall decline of the NFT marketplace indicates that without renewed enthusiasm and community interaction, more firms may be compelled to exit the market similarly to RTFKT.
Conclusion
The winding down of RTFKT’s operations serves as a pivotal reminder of the volatile nature of the NFT industry. With persistent declines and a shift back to more conventional retail strategies, stakeholders should assess their engagement with digital assets critically. The future of NFTs remains uncertain, with companies potentially facing similar fates if market dynamics do not improve.
