Despite the many challenges and fluctuations in the NFT industry in 2024, NFT (non-fungible token) still occupies an indispensable position in the Web3 field. Although the media and analysts often declare that NFT is "dead", market data shows that the unique value and market demand of NFT are still growing. According to data from the data tracker CryptoSlam, NFT sales in 2024 will be approximately US$8.5 billion. Although lower than the peak of the past few years, the number of buyers has increased by 62% to 7.5 million. This growth shows that demand in the NFT market is still strong in some aspects.
Challenges and downturn in the NFT market in 2024
The turmoil in the NFT market began in early 2024, when social media platform X (formerly Twitter) announced that it would cancel support for NFTs, a move that disappointed many NFT projects and their holders. This move was seen by some community members as the "bottom line" for NFTs, and was considered another major setback in the development of the industry. In the same month, well-known video game retailer GameStop also announced the closure of its NFT market, citing the unclear regulatory environment in the United States. In addition, American gaming company DraftKings also closed its NFT business due to "legal developments."
In the same year, blockchain platform Immutable and cryptocurrency exchange Kraken also withdrew from the NFT market. The most shocking news came from Nike's NFT project RTFKT, which announced that it would cease operations in January 2025. This series of withdrawals marked the difficulties faced by the NFT industry, and the SEC's (U.S. Securities and Exchange Commission) attention to NFT projects further exacerbated this uncertainty.
Regulatory pressure from the SEC: Challenges for NFT projects
In August 2024, the SEC sent a Wells Notice to the NFT platform OpenSea, alleging that the NFTs on its platform may constitute unregistered securities. A Wells Notice means that the regulator believes that a project may have violated securities laws, making compliance issues in the NFT industry a hot topic. NFT creators and platforms have expressed concerns about regulatory pressure, believing that such practices may limit innovation and have a negative impact on artists and creators.
In December, another NFT platform CyberKongz also received a Wells notice from the SEC, alleging that its Genesis Kongz NFT sold in 2021 violated securities laws. These regulatory challenges have put the NFT industry under unprecedented pressure in 2024.
The NFT Market’s Recovery and Future Potential
Although the NFT market experienced a seven-month downturn in 2024, signs of recovery began to emerge in the second half of the year. In October, market sales increased by 18% to $356 million, and further climbed to $562 million in November, a six-month high. In particular, on the Solana platform, NFT sales exceeded $6 billion, showing the strong performance of the NFT market on certain blockchains.
The future of the NFT industry in 2025 is full of uncertainties. Some industry experts believe that NFT technology will go beyond the scope of digital art and collectibles and expand to practical applications such as identity authentication, ownership records, and medical health documents. Jana Bertram, strategic director of the RARI Foundation, said in an interview that the potential of NFT is far from being fully tapped, and with the development of technology and the expansion of applications, NFT may usher in a new stage of growth.
In addition, OKX Global Chief Commercial Officer Lennix Lai pointed out that the transaction volume of Bitcoin NFT (Ordinals) increased by 55% from October to November 2024, showing the recovery and expansion potential of the Bitcoin NFT market. As more and more creators publish their works on the Bitcoin blockchain, the prospects for NFT on Bitcoin are becoming more and more promising.
NFT Market Outlook in 2025: Growth and Innovation Coexist
Although the NFT market has experienced a brief downturn, the future of NFT is still full of opportunities as the Web3 space expands and the crypto market grows. Yat Siu, executive chairman of Animoca Brands, said that with the growth of the crypto market, the NFT market will usher in a revival in the next few years. He pointed out that with the further development of the crypto market, the transaction volume of NFT is likely to increase significantly. It is expected that by 2026, the market value of the entire crypto market is expected to reach 10 trillion US dollars, and the NFT market will also benefit from it.
Conclusion
Although the NFT industry has experienced major challenges and fluctuations in 2024, its unique value and potential still attract the attention of a large number of investors and creators. With the advancement of technology and the recovery of the market, NFT may return to the market with a new look in the future, especially innovative applications on platforms such as Bitcoin and Solana are worth paying attention to. For NFT advocates, 2025 may be an era of growth and innovation.
