Nike and Major Brands Retreat from NFT Market Amid Legal, Regulatory, and Market Downturn
Nike and several major consumer brands, including Starbucks, DraftKings, Puma, and Reebok, are retreating from the NFT market in response to declining market activity, mounting legal challenges, and uncertain regulatory environments. Initially, NFT projects like Nike’s RTFKT and Starbucks’ Odyssey saw rapid popularity during the 2021 NFT boom, but by late 2024, trading volumes had sharply declined, with global NFT sales dropping 63% year-on-year by Q1 2025. Nike’s shutdown of its RTFKT NFT platform in December 2024 and the subsequent class-action lawsuit alleging unregistered securities and consumer protection violations underscore heightened legal scrutiny. DraftKings is also facing a $65 million lawsuit related to its Reignmakers NFT game, while Starbucks discontinued its Odyssey NFT program after just two years. Common challenges prompting these exits include market oversaturation, faltering consumer interest, high transaction costs, technology shortcomings, and environmental concerns. Despite the widespread pullback, industry experts suggest that the NFT sector may pivot toward models focused on utility and regulatory compliance. These developments signal a pivotal shift in how corporations approach digital assets, prompting crypto traders to reassess both the risks and opportunities in NFT and branded digital collectible investments.
Bearish
The news reflects a clear, broad retreat of major brands from the NFT sector due to persistent declines in trading activity, ongoing legal uncertainties, and stiffening regulatory pressures. Lawsuits against Nike and DraftKings, as well as the discontinuation of projects by Starbucks and others, highlight the increasing risks and challenges associated with branded NFT investments. For traders, this signals reduced confidence in the future value and liquidity of NFT assets tied to large consumer brands. With diminished corporate involvement and negative investor sentiment, NFT prices are likely to stagnate or decline further in the short term. Long-term prospects may depend on structural changes favoring utility and compliance, but current dynamics suggest a bearish outlook for the NFT market and related tokens.