NFT track 2024 review and 2025 outlook

Author: Ezra Reguerra, CoinTelegraph; Compiler: Deng Tong, Golden Finance

Despite some major setbacks for the asset class, non-fungible tokens (NFTs) will remain an integral part of the Web3 landscape in 2024. Industry commentators and professionals insist that the utility of NFTs remains intact, creating optimism for a recovery.

While the media occasionally declares NFTs dead, holders continue to trade them, with data tracker CryptoSlam showing NFT sales this year are around $8.5 billion.

Sales may be lower than in previous years, but the number of buyers will increase from 4.6 million in 2023 to 7.5 million in 2024, a 62% increase. This is also 37% higher than the 5.4 million unique buyers recorded in 2022, which is widely regarded as the peak of NFTs. So while trading volumes may be down, demand for the asset class is still growing.

While the space has persisted, there's no denying that NFT holders have taken a hit this year, from seven consecutive months of decline and major projects exiting the space, to the U.S. Securities and Exchange Commission issuing Wells notices to NFT projects.

In 2024, NFT projects suffered heavy setbacks

In January, social media platform X removed support for NFTs, a year after allowing paying users to link NFTs to their profile pictures. One community member called this the "bottom line" for NFTs, while another said it was "yet another stain" on the industry.

Some questioned the decision to remove the feature, arguing it provided real utility to users and raising issues with bot accounts and scammers. One community member said NFT profile pictures allow users to confirm that the person they are interacting with is real.

In the same month, video game retailer GameStop announced that it would shut down its NFT market, citing unclear regulatory clarity in the United States.

A similar move was made in July by U.S. bookmaker DraftKings, which shut down its NFT business, including its Reignmakers series and marketplace, citing "legal developments."

Additionally, second-layer blockchain Immutable and cryptocurrency exchange Kraken closed their NFT markets in August and November respectively.

In December, Nike's NFT project RTFKT announced that it would cease operations in January 2025.

SEC issues Wells notice to NFT entities

The SEC will increase 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 the NFT trading platform.

A Wells Notice is a formal notice from the SEC that it is considering taking enforcement action against an entity. The notice stated that the agency had completed its investigation and discovered evidence of possible violations of securities laws.

Finzer said the SEC alleged that NFTs on OpenSea may be considered unregistered securities. The executive said the market is ready to fight any enforcement action by the agency, adding that SEC targeting NFTs would "stifle innovation" on a larger scale and put artists and creatives at risk.

On December 16, NFT platform CyberKongz received the SEC’s Wells Notice. The CyberKongz team said the issue stemmed from its sale of the Genesis Kongz NFT in 2021.

The project said it was approached by the SEC with “concerning rhetoric” that the tokens could not be used in blockchain games without being registered as securities. CyberKongz said the SEC’s stance could have far-reaching consequences for blockchain gaming and promised to contest the charges.

NFTs face seven-month downturn in 2024

NFT sales reflect broader challenges in 2024. March saw its highest monthly sales at $1.6 billion, driven by NFTs on Ethereum, Bitcoin and Solana – the three most popular blockchains for digital collectibles.

However, the market has steadily declined, with NFTs hitting a record low in September, with monthly sales falling 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 hitting rock bottom in the market, NFTs reversed course in October, growing 18% with sales of approximately $356 million. In October, Solana-based NFT also hit a historical sales milestone of $6 billion.

The performance was even stronger in November, with monthly NFT sales reaching $562 million, the highest level in six months. Later in the year, the resurgence of NFT assets was once again driven by Ethereum, Bitcoin, and Solana collections.

NFT predictions for 2025

While some may have given up on NFTs, professionals working in the field have various theories about their possible return.

Jana Bertram, director of strategy at the RARI Foundation, said on an episode of the Hashing It Out podcast that NFTs may return in different forms, acknowledging that transaction volumes have declined but arguing that the technology still has value.

Bertram believes NFTs can expand beyond digital art and collectibles into practical applications such as identity verification, ownership records and healthcare documentation.

When asked about the prospects for Bitcoin NFTs in 2025, OKX Global Chief Commercial Officer Lennix Lai said that these assets are entering a new stage of growth. He shared that their transaction data reflects the recovery, with Ordinals’ transaction volume increasing by 55% from October to November. He said:

“We’re seeing encouraging signs of adoption – from JVRN, the first Bitcoin- backed jewelry brand to launch its Ordinals collection, to other high-profile artists choosing to have their work inscribed on the world’s first blockchain. "

Lai also shared that they are launching the Ordinals launchpad to enable creators to publish, engrave, and trade collectibles on Bitcoin. “With these fundamentals and broader market tailwinds, we believe the Bitcoin NFT movement is still in its early stages and has significant growth potential going forward,” Lai said.

At the same time, Animoca Brands executive chairman Yat Siu noted 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 with it:

“Standard Chartered predicts that the crypto market could reach $10 trillion by 2026. If this is true, then everything will be fine. This means that, with NFT’s current market volume, I think its monthly trading volume The volume will exceed billions of dollars because the entire market is growing. "