In an alarming revelation, non-fungible tokens (NFT) trading volume saw a steep 63% decline since December, despite gaining traction in the final quarter of 2024. This significant drop coincides with the recent downturn in the cryptocurrency market.
According to market research analyst Sara Gherghelas at DappRadar, NFT trading volume in December 2024 reached a high of $1.36 billion. However, it experienced a 26% plunge in January and a further 50% in February this year.
Gherghelas noted, “While there has been an anticipated resurgence in NFTs, the pace has notably slackened since the year began.” She attributed the devaluation of NFTs to their strong correlation with cryptocurrency prices.
The overall crypto market achieved its highest-ever capitalization of $3.71 trillion on December 9, 2024. CoinMarketCap reported significant price gains for several cryptocurrencies during this period. Bitcoin, for instance, briefly peaked above $109,000 on January 20, surpassing its previous high of over $108,000 recorded on December 17, just before the inauguration of US President Donald Trump.
Unfortunately, the crypto market saw most of its gains wiped out in February, amid growing macroeconomic concerns about Trump’s trade tariffs. Decentralized app activity also dipped in the same month, with an estimated 8% decrease in daily unique active wallets, bringing the count down to 24 million.
Interestingly, DappRadar observed a divergence in the NFT sector, which witnessed a 6% uptick in activity or 3.5 million users engaging with NFT platforms in February. This surge is attributed to a growing interest in AI-powered assets.
Gherghelas pointed out, “The rising incorporation of artificial intelligence in NFT projects indicates a transformation towards dynamic, interactive digital assets with enhanced utility.” She further emphasized that while speculative trading might fluctuate, NFTs with robust utility and real-world applications will catalyze long-term adoption in the Web3 ecosystem.
Profile picture NFTs emerged as the most traded, with $243 million in volume across 76,385 transactions. Gaming NFTs came in second, recording $41 million with 421,853 assets traded. Sports NFTs led in terms of transactions, with 659,097 deals amounting to $7.7 million in volume.
DappRadar’s January report revealed a grim picture for 2024, marking it as the worst year for NFTs since 2020 due to volatility and soaring token prices. The year saw $13.7 billion in trading volume with less than 50 million sales. In contrast, NFTs had their most successful year in 2022, registering $57.2 billion in trading volume and 121.7 million sales.
