Brands like Nike Are Dipping Toes in the NFT Space: Here’s Why
Brands like Nike, Reebok, and Adidas have all recently announced that they will be getting into the NFT space. Their reasons for entering the sector are varied. Nike’s primary motivation is to reach new consumers, while Adidas and Reebok are looking to understand consumers better and build a sustainable digital presence. While the exact strategies that Nike, Adidas, and Reebok will use to get into the NFT space remain to be seen, one thing is clear: the move is an indication that the sports industry is continuing to play a significant role in the growth of the sector.
In December 2021, Nike acquired RTFKT, a cryptocurrency project aiming to fuse blockchain technology with fashion and the sneaker culture. Nike is the largest supplier of athletic footwear and apparel and a major manufacturer of athletic equipment. The abrupt stepping into the booming NFT industry surprised many. However, the integration was inevitable, with companies like Adidas, Louis Vuitton, Coca-Cola, Lamborghini, and Samsung steadily raking up their presence in the metaverse. The point of traction remains the exploitability of the metaverse and NFT ecosystem.
The metaverse integrates our physical and digital lives seamlessly, resulting in a unified, virtual ecosystem where we can work, play, relax, do business, and socialize with each other. According to Bloomberg, metaverse will be valued at $783.3 billion in 2024.
“The nascency factor never seems to hinder the growth rate,” stated Dev Sharma, CEO of Blockwiz, a crypto marketing agency. He further added, “Institutions such as Goldman Sachs, JP Morgan heavily invest in the blockchain ecosystem. While Goldman Sachs has offered Over-the-Counter options trading for cryptos, JP Morgan is the first metaverse bank where you can transact with crypto and NFTs. Both the investment monoliths bet metaverse will be a $1 trillion a year ecosystem. Since NFTs are one of the key aspects in the Metaverse, it’s no surprise that brands are quickly tapping into the opportunity that the space presents.”
NFTs are Non-Fungible Tokens representing digital art or collections, video clips of best moments in sports and entertainment, gaming skins, and collectibles. They are stored in a distributed ledger powered by blockchain technology. These are one-of-a-kind items that owners cannot exchange for another NFT. NFT provides an owner authority of any asset.
Say Nike collaborates with DC universe to make limited-edition sneakers. You purchase them, and now you are the owner. NFT replicates this process in the metaverse. Digital production of these limited-edition shoes as NFTs can be minted on the blockchain. The exclusivity of the asset makes it a humongous store of value, making the Nike shoes much more valuable and unique. It’s no wonder then that Nike has identified the potential of NFT as an opportunity to reach new consumers, hence is pushing to build a sustainable digital presence.