Industry News International Brands pushing into Cryptocurrencies is a Double-Edged Sword

International Brands pushing into Cryptocurrencies is a Double-Edged Sword

December 6, 2022

In the middle of November 2022, when the drastic fallout and expanding contagion of the FTX exchange became apparent, a much bigger entity was doubling down on the crypto space and blockchain technology in particular. That entity is Nike, the famous sportswear and shoemaking company. It launched its platform called Swoosh, which is a fully-functional Web3 application. It will allow fans of Nike sneakers to buy and sell, but also hold digital wearables and also create their personal collections through the use of non-fungible tokens. Nike is by no means the only massive international brand that is both expanding into the cryosphere and adapting existing technologies for its own purposes. Other big names include the US-based NFL, Instagram, Starbucks, and Budweiser. 

In the fashion domain, brands like Adidas and Dolce & Gabbana are doing very similar things to Nike. Analysts are certain that the same list will grow and that it will incorporate more and more diverse businesses. While niches like esports were always crypto-friendly, traditional brands like the big fashion and sportswear companies were never exactly the first adopters of cryptocurrencies and blockchain tech. Now, the times are changing and they are evolving during a massive retraction of the cryptocurrency markets and a prolonged crypto winter. That could mean that big brands like these help in the resurrection of digital currencies, especially their collective market cap. But, others are worried about these prospects just as much as they are appreciative of the opportunities. 

Native Crypto Pullback

The injection of money from these non-crypto companies is first and foremost good news for the overall cryptocurrency market cap, being that the native blockchain companies are presently experiencing a big pullback. The implosion of the FTX exchange marked a big turning point in that process, giving the crypto markets a taste of the mutually connected massive ventures that are very much tied to the cryptocurrency price movement. As one big US exchange failed, it became clear just how interconnected it was to so many other digital currency ventures in the country, and internationally as well. 

Crypto companies like Binance even considered buying out FTX, but quickly dropped the same option as the level of scalability tied to this since the business became clear. The effect is that everyone is jealously guarding their corporate coffers, as the chance of even worse times in the near future grows steadily higher. Now, regular companies and big brands are offering the possibility of their corporate funds entering the fray in terms of investment. The same money could somewhat offset the negative ratio which is a likely scenario even if the FTX contagion stops from spreading. 

End to Rebellious Streak

The influx of big brand money of course comes with a range of downsides. Here, the most obvious is the issue of the rebellious and anti-establishment sentiment that has been following the BTC token and the whole cryptosphere since its inception. The same narrative has been a big driving force for its early adopters, who very much appreciated not being a part of the regular crowd. Naturally, a lot of that was simple bolstering and even those who were very crypto maximalists did not mind the easy and simple ability to turn their digital tokens into fiat funds. 

This was granted to the crypto market through things like crypto exchange integrations with the banking system. However, that took place in the shadows of the regular everyday social media chatter and did not hamper the rebellious image of digital currencies. Having brands like Nike and Adidas use famous tokens will very much change that perception and many do not like that. 

Regulatory Demands

Beyond the issue of brand awareness and reputation, another big problem for cry[pto and these big brand deals would be regulatory demands. Having these partnerships would open the crypto companies and market connections to legal and regulatory concerns of the same huge public companies. Even now, these businesses are very mindful of the terminology that their marketing departments use. Instead of terms like crypto, blockchain, or even the omnipresent NFTs, these brands are much more likely to use terms like digital collectibles. 

Beyond that, much more serious oversight lies in wait and is ready to jump at the opportunity to expose some risky practice or bending of rules that crypto companies are somewhat inclined to historically speaking. International companies are more than aware of that danger and are actively calculating with it in mind. 

Digital Domain

While brands like Nike will always have a huge reach in terms of getting the attention of the wider public, the actual possibility for the crypto domain and big company integration lies in the digital domain. Here, social media and other huge platforms have a much more naturally inclined public for anything and everything crypto-related. For example, Instagram had a trial of a group of influences in the NFT domain. With its reach of over a billion users, any structural changes that incorporate crypto would be more valuable to the digital currency domain than any clothing company. The same is even more true for businesses like Amazon and similar global digital brands. However, those types of brand collaborations seem even less likely than the prospect of consumer brands employing famous digital currencies. 

The case of then-Facebook’s Libre project is a good example of the mindset behind such possibilities. Huge tech companies are more prepared to invest money and other resources in their native digital tokens than to just employ existing ones. Because of that, the potential of brand collaborations in the crypto and mainstream business world remains on the level of consumer brands. That will include businesses like Nike taking on some aspect of the blockchain technology, but making sure they are protected both in regulatory and financial sense from any possible fallout. The same will in turn present a very limited possibility for cryptocurrencies and plenty of negative points as well. Because of that, chances of the crypto winter being cut short because there are NFT sneakers collectibles are very slim.

Source: Coindesk