The NFT market has suffered a sharp decline, with trading volume tumbling 63% since December. Despite signs of recovery in late 2024, the downturn coincided with a broader slump in the crypto market.
NFT Trading Market Sees Significant Drop
According to DappRadar, NFT trading volume hit $1.36 billion in December. However, it fell 26% in January and dropped another 50% in February. Sara Gherghelas, an analyst at DappRadar, attributed this decline to the strong correlation between NFT valuations and crypto prices.
“While NFTs showed signs of a comeback, momentum slowed at the start of the year,” Gherghelas noted in a March 6 industry report.
NFT trading volume steadily increased in the latter half of 2024 but declined sharply at the beginning of the new year, according to DappRadar.
Crypto Market Volatility Impacts NFTs
In December 2024, the crypto market capitalization reached an all-time high of $3.71 trillion, with many cryptocurrencies experiencing record price surges. Bitcoin briefly surpassed $109,000 on Jan. 20, breaking its previous all-time high of $108,000 from December.
However, gains evaporated in February amid concerns over U.S. trade tariffs introduced by President Donald Trump. The downturn led to a decline in decentralized app activity, with daily unique active wallets dropping 8% to 24 million.
In February 2025, NFT trading revenue was estimated between $200 million and $498 million, marking a significant decline of over 60% from December 2024. The average revenue likely hovered around $300 million, reflecting a sharp downturn that began in late 2024.
AI-Powered NFTs Show Growth Amid Decline
Despite the overall slump, NFT activity rose 6% in February, with 3.5 million users engaging with NFT platforms. This increase was driven by growing interest in AI-powered NFTs, which offer more interactive and dynamic experiences.
“The integration of artificial intelligence into NFTs signals a shift toward more utility-driven digital assets,” Gherghelas said. She believes that NFTs with real-world applications will drive long-term adoption in Web3.
Breakdown of NFT Categories
Among NFT types, profile picture NFTs remained dominant, generating $243 million from 76,385 sales.
- Gaming NFTs followed, with $41 million in trading volume and 421,853 assets sold.
- Sports NFTs led in transaction count, recording 659,097 sales and $7.7 million in volume.
Investor sentiment has cooled following the bullish NFT phase of 2024. The number of active wallets dropped to 17,700, while new user adoption remained sluggish, with projections indicating only 11.64 million users throughout 2025.
NFT Trading Market Faces Toughest Year Since 2020
A January DappRadar report revealed that NFTs had their worst year since 2020, recording $13.7 billion in trading volume and fewer than 50 million sales. This decline stemmed from market volatility and rising token prices.
By contrast, 2022 marked the NFT market’s peak, with $57.2 billion in trading volume and 121.7 million sales as NFTs gained mainstream popularity.
What Lies Ahead for NFTs?
As the market navigates volatility, experts suggest that NFT projects with strong utility will survive while speculative trading declines. The rise of AI-enhanced NFTs signals a shift toward more sustainable adoption in the evolving Web3 landscape.
