Despite facing some significant setbacks, non-fungible tokens (NFTs) remain an indispensable part of the Web3 space in 2024. Industry commentators and professionals maintain that the utility of NFTs is still intact, fostering optimism for a recovery.
While the media occasionally declares that NFTs are dead, holders continue to trade, with data tracker CryptoSlam showing that NFT sales this year reached 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 unique buyers recorded in 2022, a year widely regarded as the peak of NFTs. Therefore, while transaction volume may have declined, demand for this asset class continues to grow.
Although the field has always existed, it is undeniable that NFT holders have suffered significantly 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 canceled its support for NFTs. The year before, the platform allowed paid users to link NFTs to their profile pictures. One community member called this the 'bottom line' for NFTs, while another described it as 'another stain' on the industry.
Some questioned the decision to remove this feature, arguing it provided real utility for users and raised issues of bot accounts and scammers. One community member stated that NFT profile pictures allowed users to confirm that the people they were interacting with were real.
In the same month, video game retailer GameStop announced it would close its NFT marketplace, citing unclear U.S. regulations.
In July, American gambling company DraftKings took similar actions, shutting down its NFT business, including its Reignmakers series and marketplace, citing 'legal developments'.
Additionally, the layer-2 blockchain Immutable and cryptocurrency exchange Kraken closed their NFT markets 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 has intensified its focus on NFTs in 2024. On August 28, OpenSea CEO Devin Finzer stated in an X post that the securities regulator had issued a Wells notice to NFT trading platforms.
A Wells notice is a formal notification issued by the SEC indicating that it is considering taking enforcement action against an entity. This notice indicates that the agency has completed its investigation and found evidence of potential violations of securities laws.
Finzer stated that the SEC's charges against NFTs on OpenSea could be viewed as unregistered securities. The executive indicated that the market is ready to combat any enforcement actions from the agency and added that the SEC's actions against NFTs would '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 in 'concerning terms', stating that tokens cannot be used in blockchain games without being registered as securities. CyberKongz indicated that the SEC's stance could have far-reaching implications for blockchain gaming and pledged to contest these allegations.
NFTs faced seven months of stagnation in 2024.
NFT sales reflect broader challenges in 2024. March saw the highest monthly sales, reaching $1.6 billion, driven by NFTs on Ethereum, Bitcoin, and Solana—three of the most popular digital collectibles blockchains.
However, the market has been steadily declining, 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 by 18%, with sales of approximately $356 million. In October, Solana-based NFTs also reached a historic sales milestone of $6 billion.
November showed 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 collectibles.
NFT predictions for 2025.
While some may have given up on NFTs, professionals working in the field have various theories about their potential return.
Jana Bertram, the Strategic Director of the RARI Foundation, stated in an episode of the Hashing It Out podcast that NFTs may return in different forms. She acknowledged a decline in transaction volume but believes the technology still has value.
Bertram believes that NFTs can expand beyond digital art and collectibles to practical applications such as authentication, ownership records, and healthcare documentation.
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 a recovery, with Ordinals' transaction volume increasing by 55% from October to November. He said:
'We have seen encouraging signs of adoption—from the first jewelry brand supported by Bitcoin to launch an Ordinals series, to other well-known artists choosing to engrave their works on the world's first blockchain.'
Lai also shared that they are launching an Ordinals launchpad to enable creators to publish, engrave, and trade collectibles on Bitcoin. 'With these foundations and broader market tailwinds, we believe that the Bitcoin NFT movement is still in its early stages and has tremendous growth potential in the future,' Lai said.
Meanwhile, Animoca Brands Executive Chairman Yat Siu pointed out that the NFT market will become larger than in 2021 and 2022. He believes that as the crypto market grows, every component within the Web3 space will grow as well.
'Standard Chartered predicts that by 2026, the crypto market could reach $10 trillion. If that is the case, everything will be fine. This means that with the current market trading volume of NFTs, I believe their monthly transaction volume will exceed billions of dollars as the entire market grows.'
Author of this article: Golden Selection.
