Sports products company Fanatics is selling its stake in non-fungible token (NFT) company Candy Digital due to declining confidence in the asset class.
Founded in 2011, Fanatics has made a name for itself in sports merchandising and e-commerce with a $31 billion valuation.
However, with the cryptocurrency bear market hitting the NFT sector hard in 2022, Rubin’s company now appears to be moving away from a “standalone” NFT business.
a group of investors led by Novogratz According to CNBC, Galaxy Digital plans to buy shares in Candy Digital. In an email shared with the outlet, Rubin wrote:
“Over the past year, it has become clear that NFTs are unlikely to be sustainable or profitable as stand-alone businesses.”
He said that selling its ownership interest in Candy Digital “allowed investors to get back most of their investment through cash or additional shares in Fanatics.”
This is a positive outcome for investors, “especially in a collapsing NFT market where both standalone NFT trading volumes and prices are plummeting,” he added. According to Rubin, NFTs alone won’t create much value.
“We believe that digital products bring more value and usefulness when connected to physical collectibles to create the best experience for collectors.”
gain fanatic top trading card In January 2022, it was about $500 million. Additionally, following the launch of Candy Digital last year, he acquired the rights to produce Major League Baseball trading cards and his NFTs.
Fanatics raised $700 million in new capital in December 2022, according to CNBC. According to CNBC, the funds will be used for potential merger and acquisition opportunities across collectibles, sports betting and gaming businesses.
candy digital Securing $100 Million in Funding October 2021, then valued at $1.5 billion.
However, the NFT market contracted significantly in the 2022 crypto winter. According to Nonfungible.com Market trackerdaily sales have dropped from over 100,000 in January 2022 to around 15,000 today.
Fanatics and Candy Digital did not respond to Cointelegraph’s request for comment at the time of publication.