Kraken to Shutter NFT Marketplace by 27 February 2025
Kraken, a leading centralised exchange, has announced plans to discontinue its NFT marketplace to focus on new initiatives.
Starting 27 November 2024, users will no longer be able to list, bid, or sell NFTs, with the platform transitioning to withdrawal-only mode.
Withdrawals will remain available until the marketplace permanently shuts down on 27 February 2025.
In an email to clients, Kraken outlined the three-month withdrawal period, emphasizing its intention to reallocate resources toward developing new products and services.
KRAKEN TO SHUT DOWN NFT MARKETPLACE FOR NEW PROJECTS
Kraken is closing its NFT marketplace to refocus resources on upcoming projects, the company confirmed.
As of Nov. 27, 2024, users will no longer be able to list, bid, or sell NFTs, though withdrawals will remain available.… pic.twitter.com/F4JvrBHCO7
— Crypto Town Hall (@Crypto_TownHall) November 26, 2024
A Kraken spokesperson confirmed the decision, marking a strategic shift for the platform amidst evolving market priorities:
“We've made the decision to close our NFT marketplace so we can shift more resources into new products and services, including unannounced initiatives in-development. Clients have been informed of the changes and our team will support them as they move their NFTs to their Kraken Wallet or a self-custodial wallet of choice.”
Kraken's NFT Platform Struggles to Meet Expected Growth
Launched in November 2022, Kraken's NFT marketplace offered over 250 NFT collections with zero gas fees for buyers and sellers.
Despite these features, it encountered significant headwinds as the NFT sector faced mounting challenges and the broader market's decline in 2024 created insurmountable obstacles for sustained growth.
The oversaturated market showed signs of stagnation, exacerbated by declining interest in digital collectibles.
Industry data from DappRadar illustrates the sector's struggles.
NFT trading volume hit a yearly low of $471 million in August 2024, a 16% drop from the previous month.
Compared to $12.6 billion in Q1 2022, trading activity fell to $3.9 billion in Q1 2024.
Moreover, 98% of NFT collections saw minimal or no trading this year, with only 0.2% of new drops yielding profits.
Most NFTs depreciated by over 50% shortly after launch, leaving holders with average losses of 44.5% since 2023.
The average NFT lifespan also plummeted to 1.14 years, compared to 2.85 years for other crypto projects.
Nearly one-third of NFT initiatives failed in 2023, marking the highest rate of collapse in the sector's history.
Source: Dune
Against this backdrop, Kraken's decision to shutter its NFT marketplace and reallocate resources is unsurprising.
The exchange recently announced plans to streamline its operations, optimise its policies, and list 19 new tokens, including the Donald Trump-inspired "TRUMP" token and other popular meme coins.
🚨BREAKING: Crypto exchange Kraken @krakenfx to list $TRUMP @MAGAMemecoin!
Listing date & time to be announced. pic.twitter.com/iXFb3FztGc
— Steven Steele (@MrStevenSteele) November 22, 2024
By shifting focus to more promising ventures, Kraken aims to align its efforts with evolving market demands.
Kraken Faces Intense Competition & Regulatory Pressure
Kraken's NFT marketplace not only faced challenges from the broader market downturn but also stiff competition from niche platforms like OpenSea and Blur.
OpenSea, for example, reported a trading volume of $110.5 million in August, a 27% drop from the previous month, highlighting the ongoing struggles in the NFT sector.
Although the market showed signs of recovery by November, it remains far from the heights reached in 2022.
Hard to believe what am reading but @krakenfx is closing their NFT platform now. LOL
In Feb'23 I wrote to your PM, Kanj to embrace Ordinals ASAP as well as contacted other friends from the biz. Instead your top level mngmt invested into competition.
Kinda rekt, @jespow ? pic.twitter.com/pT1zbmppcd
— Tomas S 🥪 (@skantoshi) November 26, 2024
Regulatory pressures have added another layer of complexity for Kraken.
The company is embroiled in a legal battle with the Securities and Exchange Commission (SEC) over whether crypto tokens traded on its platform qualify as investment contracts under the Howey test, making them subject to securities laws.
The lack of clear guidelines for NFT-related tokens leaves open the question of whether regulatory uncertainty played a role in the marketplace's closure.
Despite these challenges, Kraken appears to be positioning itself for the future.
The exchange announced plans to launch its own blockchain in 2025, signalling its commitment to innovation amidst an evolving regulatory and competitive landscape.
Whether this strategic pivot is a response to legal pressures or a calculated shift toward more promising ventures remains to be seen.
Community More Interested in Kraken's Product Offerings
Kraken users appear to be shifting their attention from the closure of the NFT marketplace to the platform's latest product innovations.
Through its official X (formerly known as Twitter) account, Kraken introduced a revamped Explore page and an in-app browser for its non-custodial wallet.
The Explore page enables Kraken Wallet users to discover new onchain opportunities: Find the latest and most relevant dApps across multiple categories including Popular, Staking, NFTs, and Tools. pic.twitter.com/dg0QpFJ16H
— Kraken Exchange (@krakenfx) November 26, 2024
The Explore page provides users with curated insights into emerging market opportunities, while the in-app browser enables seamless interaction with decentralised applications (dApps) directly within the Kraken Wallet.
Download Kraken Wallet today or update your app to unlock new onchain experiences!
Want to learn more? Read our blog for all the details ⤵️ https://t.co/OFQePttxcX
— Kraken Exchange (@krakenfx) November 26, 2024
These updates highlight Kraken's commitment to enhancing user experiences and adapting to the evolving needs of the crypto ecosystem.
