Author: Ezra Reguerra, CoinTelegraph; Translation: Deng Tong, Jinse Finance.
Although this asset class has faced some significant setbacks, non-fungible tokens (NFTs) remain an integral part of the Web3 space in 2024. Industry commentators and professionals insist that the utility of NFTs remains intact, which brings optimism for recovery.
While the media occasionally declares NFTs dead, holders continue to trade, with data tracker CryptoSlam showing NFT sales this year at approximately $8.5 billion.
Sales volume may be lower than in previous years, but the number of buyers increased from 4.6 million in 2023 to 7.5 million in 2024, a growth of 62%. This is also 37% higher than the 5.4 million independent buyers recorded in 2022, a year widely regarded as the peak for NFTs. Therefore, while transaction volume may decline, demand for this asset class continues to grow.
Despite the ongoing presence of this sector, it is undeniable that NFT holders were hit hard this year, from seven consecutive months of decline and major projects exiting the space, to the SEC issuing Wells notices to NFT projects.
In 2024, NFT projects faced significant setbacks.
In January of this year, the social media platform X removed support for NFTs, after allowing paid users to link NFTs to their profile pictures the previous year. One community member called this the 'last straw' for NFTs, while another referred to it as 'another stain on the industry.'
Some questioned the decision to remove the feature, arguing that it provided real utility for users and raised concerns about bot accounts and scammers. One community member noted that NFT profile pictures allowed users to confirm that the person they were interacting with was real.
In the same month, video game retailer GameStop announced it would close its NFT marketplace due to unclear U.S. regulations.
In July, U.S. sportsbook DraftKings also took similar action, citing 'legal developments' as the reason for shutting down its NFT business, including its Reignmakers series and marketplace.
Additionally, the second layer blockchain Immutable and cryptocurrency exchange Kraken both closed their NFT marketplaces in August and November, respectively.
In December, Nike's NFT project RTFKT announced it would cease operations in January 2025.
The SEC issued a Wells notice to NFT entities.
The SEC ramped up its focus on NFTs in 2024. On August 28, OpenSea CEO Devin Finzer stated in an X post that the securities regulator issued a Wells notice to NFT trading platforms.
A Wells notice is a formal notification issued by the SEC indicating that it is considering enforcement action against an entity. This notice indicates that the agency has completed its investigation and found evidence that may violate securities laws.
Finzer stated that the SEC's accusations regarding NFTs on OpenSea could be seen as unregistered securities. The executive mentioned that the market is prepared to combat any enforcement actions from the agency and added that the SEC's stance on NFTs will 'stifle innovation' more broadly, putting artists and creatives at risk.
On December 16, the NFT platform CyberKongz received a Wells notice from the SEC. The CyberKongz team stated that the issue stemmed from their sale of Genesis Kongz NFTs in 2021.
The project stated that the SEC engaged with it using 'concerning language,' claiming that tokens cannot be used for blockchain games unless registered as securities. CyberKongz noted that the SEC's stance could have far-reaching effects on blockchain gaming and vowed to contest these allegations.
NFTs faced seven months of stagnation in 2024.
NFT sales reflect broader challenges for 2024. March saw the highest monthly sales, reaching $1.6 billion, thanks to NFTs on Ethereum, Bitcoin, and Solana—three of the most popular blockchains for digital collectibles.
However, the market steadily declined, with NFTs hitting a historic low in September, as monthly sales fell below $300 million for the first time since 2021. Total NFT transaction volume also dropped from 7.3 million in August to 4.9 million in September.
After the market hit its lowest point, NFTs reversed course in October, growing 18%, with sales amounting to approximately $356 million. In October, Solana-based NFTs also reached a historic sales milestone of $6 billion.
November saw even stronger performance, with monthly NFT sales reaching $562 million, marking the highest level in six months. Later this year, the recovery of NFT assets was again driven by Ethereum, Bitcoin, and Solana collections.
NFT Predictions for 2025
While some may have given up on NFTs, professionals working in the space have various theories about their potential return.
RARI Foundation's Strategic Director Jana Bertram stated in an episode of the Hashing It Out podcast that NFTs may return in different forms. He acknowledged that trading volume has decreased but believes the technology still has value.
Bertram believes NFTs can expand beyond digital art and collectibles to practical applications such as authentication, ownership records, and healthcare documents.
When asked about the prospects for Bitcoin NFTs in 2025, OKX's Global Chief Business Officer Lennix Lai stated that these assets are entering a new growth phase. He shared that their trading data reflects recovery, with Ordinals trading volume increasing by 55% from October to November. He said:
'We are seeing encouraging signs of adoption—from the first jewelry brand supported by Bitcoin to launch the Ordinals series, to other well-known artists choosing to inscribe their works on the world’s first blockchain.'
Lai also shared that they are launching an Ordinals launchpad to enable creators to publish, inscribe, and trade collectibles on Bitcoin. 'With these foundations and broader market tailwinds, we believe the Bitcoin NFT movement is still in its early stages, with enormous growth potential ahead,' Lai said.
Meanwhile, Animoca Brands Executive Chairman Yat Siu pointed out that the NFT market will be larger than in 2021 and 2022. He believes that every component within the Web3 space will grow alongside the expansion of the crypto market.
'Standard Chartered Bank predicts that by 2026, the crypto market could reach $10 trillion. If this is true, everything will be fine. This means that based on the current trading volume of NFTs, I believe their monthly trading volume will exceed billions of dollars as the entire market grows.'
