Non-fungible tokens (NFTs) remained an integral component in the Web3 space throughout 2024 despite some big setbacks for the asset class. Industry commentators and professionals maintain that the utility of NFTs remains intact, fueling optimism for a revival.
While media outlets have occasionally declared NFTs dead, holders continue to trade, and data tracker CryptoSlam shows that NFTs have recorded roughly $8.5 billion in sales this year.
The sales volume may be lower than in previous years, but the number of buyers increased by 62% from 4.6 million in 2023 to 7.5 million in 2024. This is also 37% more than the 5.4 million unique buyers recorded in 2022, a year widely considered the peak of NFTs. So, while volumes may be down, there is still a growing demand for the asset class.
Even though the space has endured, there’s no denying that NFT holders took a beating this year, from a seven-month downward streak and major projects dropping out of the space to the United States Securities and Exchange Commission sending Wells notices to NFT projects.
NFT projects faced numerous setbacks throughout 2024
In January, social media platform X removed support for NFTs after a year of allowing paid subscribers to link them to their profile pictures. One community member called it the “bottom” for NFTs, while another said it’s “another black eye” for the industry.
Some questioned the decision to remove the feature, arguing it had provided real utility for users and bringing up the issue of bot accounts and scammers. One community member said NFT profile pictures allowed users to confirm that the people they were interacting with were real.
Source: Dronerogan
The same month, video game retailer GameStop announced it would shut down its NFT marketplace, blaming the lack of regulatory clarity in the US.
American gambling company DraftKings made a similar move in July, shutting down its NFT business, including its Reignmakers collections and marketplace. The business cited “legal developments” as the reason.
In addition, layer-2 blockchain Immutable and crypto exchange Kraken wound down their NFT marketplaces in August and November, respectively.
In December, the Nike-owned NFT project RTFKT announced it would sunset its operations in January 2025.
SEC hands out Wells notices to NFT entities
The SEC ramped up its focus on NFTs in 2024. On Aug. 28, OpenSea CEO Devin Finzer said in an X post that the securities regulator sent a Wells notice to the NFT trading platform.
A Wells notice is a formal notification from the SEC that it is considering bringing enforcement action against an entity. The notice indicates that the agency completed an investigation and discovered evidence of potential breaches of securities laws.
Source: Devin Finzer
Finzer said the SEC alleged that NFTs on OpenSea may qualify as unregistered securities. The executive said the marketplace was ready to fight any enforcement actions from the agency, adding that the SEC targeting NFTs would “stifle innovation” on a broader scale, putting artists and creatives at risk.
On Dec. 16, NFT platform CyberKongz received its own Wells notice from the SEC. The CyberKongz team said the issue stemmed from its sale of Genesis Kongz NFTs in 2021.
The project said the SEC approached it with “concerning rhetoric” that a token cannot be used with a blockchain game without registering it as a security. CyberKongz said the SEC’s stance could have far-reaching implications for blockchain gaming and pledged to contest the allegations.
NFT faced a seven-month downturn in 2024
NFT sales volumes mirrored the broader challenges of 2024. March saw the highest monthly sales at $1.6 billion, buoyed by NFTs on Ethereum, Bitcoin and Solana — the three most popular blockchains for digital collectibles.
However, the market declined steadily, reaching a record low in September, when monthly sales fell below $300 million for the first time since 2021. Total NFT transactions also decreased, from 7.3 million in August to 4.9 million in September.
After the market reached its lowest point, NFTs reversed course in October, increasing by 18% to see sales of about $356 million. October also saw Solana-based NFTs reach a milestone of $6 billion in all-time sales.
An even stronger performance followed in November as NFTs recorded monthly sales volumes of $562 million, their highest in six months. The resurgence of NFT assets later in the year was again driven by collections on Ethereum, Bitcoin and Solana.
NFT predictions for 2025
While some may have given up on NFTs, professionals working in the space have various theories on their potential comeback.
Jana Bertram, head of strategy at RARI Foundation, said during an episode of Cointelegraph’s Hashing It Out podcast that NFTs will likely return in a different form, acknowledging that trading volumes have declined but arguing that the technology remains valuable.
Bertram believes NFTs can expand beyond digital art and collectibles, extending into practical applications like identity verification, ownership records and healthcare documentation.
When asked about what 2025 holds for Bitcoin NFTs, Lennix Lai, the global chief commercial officer at OKX, said these assets are entering a new growth phase. He shared that their trading data reflects a resurgence, with a 55% increase in Ordinals volume from October to November. He said:
“We’re seeing encouraging signs of adoption - from JRNE, the first Bitcoin-backed jewelry brand to launch an Ordinals collection, to other established artists who are choosing to inscribe their creations on the world’s first blockchain.”
Lai also shared that they are launching an Ordinals launchpad to empower creators to launch, inscribe and trade collections on Bitcoin. “With these foundations in place and broader market tailwinds, we believe the Bitcoin NFT movement is still in its early stages with significant growth potential ahead,” Lai said.
Meanwhile, Animoca Brands executive chairman Yat Siu told Cointelegraph that NFTs will become even bigger than they were in 2021 and 2022. He argued that as the crypto markets grow, every component within the Web3 space will follow:
“Standard Chartered predicted that by 2026, the crypto market could become $10 trillion. If that’s true, then everything will rise. That means that NFTs, at its current market trading volumes, I think it’s going to exceed billions of dollars of volume a month just because the whole market increases.”
Siu also said that as more people get into Bitcoin (BTC), they will discover NFTs and their utility. He said that while Bitcoin is a valuable store of value, NFTs provide services in Web3 gaming. “NFTs are gonna rise. And, of course, the token ecosystems surrounding it,” he added.