Mainstream NFT Market Struggles - Legal Disputes and Reduced Volumes Force Companies Like Nike to Withdraw
Let's dive into the ups and downs of NFTs in the modern market, as major brands like Nike, Starbucks, DraftKings, PUMA, and Reebok are taking a step back from their digital art ventures.
The NFT craze took off like a rocket in 2021, with soaring trading volumes and high-profile endorsements. Brands sensed the opportunity, launching their own NFT collections to court tech-savvy consumers and explore fresh revenue sources.
Nike jumped into the fray by snapping up RTFKT, creating virtual sneakers. Starbucks introduced the Odyssey NFT program, DraftKings partnered with the NFL Players Association for the Reignmakers game, and both PUMA and Reebok joined the game with their Super PUMA and NST2 projects.
But just as quick as it rose, the NFT market fell, exposing its vulnerabilities. By 2024, trading volumes had plummeted, and many projects failed to deliver long-term value. Today, the total NFT trading volume is a mere shadow of its peak in 2021.
This market slump has pushed brands to reconsider their strategies. Case in point? Nike shuttered RTFKT in December 2024 and faced a lawsuit for alleged unregistered securities selling, causing losses of over $5 million. Starbucks terminated its Odyssey NFT program just two years after its launch, and DraftKings met controversy when it stopped its Reignmakers project, resulting in a whopping $65 million lawsuit from the NFLPA.
PUMA and Reebok have gone quiet, with their projects failing to deliver updates despite generating initial hype. The silence from both brands hints at caution as the NFT bubble deflates and consumer interest wanes.
Is this the end for NFTs? Not quite! Alexander Salnikov, co-founder of Rarible, says the next wave of growth is about unlocking new forms of ownership and access that resonate with the internet generation. Projects offering tangible utility, like digital assets or loyalty programs with clear benefits, are more likely to stand the test of time. Brands may also opt for hybrid strategies, blending physical and digital realms to navigate around purely speculative NFTs.
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Remember that BeInCrypto is dedicated to offering unbiased, transparent reporting, so while we strive to provide accurate information, it's always best to double-check the facts independently and consult a professional before making decisions. Happy exploring!
Some Interesting Facts:
- The NFT market experienced a 63% decline in trading volumes from Q1 2024 to Q1 2025 compared to the same period in 2021[2][5].
- While the overall NFT market is struggling, some NFT collections, like Pudgy Penguins and Doodles, have remained resilient[5].
- Brands must weigh the potential reputational damage from abandoning NFT projects and the impact on consumer trust[2].
- Brands like Nike, Starbucks, and DraftKings temporarily halted their digital art ventures following a market slump in NFTs, exposing their vulnerabilities.
- Although the NFT market declined, brands continued to explore new opportunities, with Nike venturing into virtual sneakers and Starbucks launching the Odyssey NFT program.
- Nike's virtual sneaker project, RTFKT, faced legal issues, leaving the brand to shut it down and face a multi-million dollar lawsuit.
- Starbucks terminated its Odyssey NFT program just two years after its launch, leading to controversy and a potential impact on consumer trust.
- Celebrity endorsements and partnerships, such as Nike with QYLD, Play-Fi, andɾMASK, continue despite the market slump, suggesting a potential shift in strategy.
- The decline in NFT trading volumes has pushed brands to reconsider hybrid strategies, merging physical and digital realms for more sustainable and less speculative projects.
- Crypto trading platforms like Uphold allow users to gain early access to new tokens, offering a one-stop shop for trading various assets.
- The NFT market has been characterized by volatility, with total trading volume dropping significantly from its 2021 peak.
- Despite the challenges, some NFT collections, such as Pudgy Penguins and Doodles, have managed to remain resilient, offering potential long-term value in the evolving world of blockchain finance and technology.
