Nike (NKE) has confirmed that it sold its digital product subsidiary RTFKT in December last year, marking a strategic retreat from the NFT space. The company stated that the sale represents an adjustment toward a new chapter and that it will continue to invest in innovative experiences that blend physical, digital, and virtual environments. However, specific transaction terms and buyer information were not disclosed.
Strategic Acquisition and Market Shift
In December 2021, Nike acquired RTFKT, known for virtual sneakers and NFTs, to accelerate its digital transformation and expand its virtual product portfolio. The brand, through its CloneX collaboration with artist Takashi Murakami, was seen as a key lever for entering Web3 during the NFT boom at the time. However, as the overall NFT market declined, demand and pricing power for RTFKT significantly contracted. In 2024, Nike gradually scaled back related investments, halted new NFT production, and ultimately shut down RTFKT operations by the end of the year.
Legal Disputes and Industry Challenges
The termination of RTFKT sparked a class-action lawsuit from NFT holders. Plaintiffs accused Nike of failing to register the NFTs as securities and inadequately disclosing project termination risks, violating consumer protection laws in multiple jurisdictions and causing investor losses. While the exact claim amount was unspecified, it exceeded $5 million. Nike’s situation is not an isolated case; traditional companies such as Starbucks (SBUX) and Disney (DIS) have also faced setbacks in their Web3 ventures due to market volatility and business model challenges.
Underlying Issues in the NFT Market
Behind the market frenzy lie deeper issues of trust and regulation. Persistent problems include difficulties in verifying ownership, ambiguous rights definitions, and a lack of consumer protection mechanisms. Many NFTs contain only hyperlinks that can easily become invalid, confer no substantial rights, and vary widely in quality. Fraud and theft are frequent, while trading platforms often rely on “buyer beware” principles with insufficient oversight. Even during the market downturn, some industry participants remain optimistic about the long-term prospects of NFTs, with projects by brands like Louis Vuitton and organizations like the NBA still moving forward. However, such practices often depend on the credibility of centralized institutions, diverging from the early vision of decentralization.
The journey from Nike’s acquisition to the sale of RTFKT reflects the cyclical shift of the NFT market from hype to rationality. Finding a sustainable balance between technological innovation, business models, and regulatory frameworks remains a core challenge for industry participants.
