The non-fungible token (NFT) market has displayed a notable rollercoaster trajectory throughout 2024, culminating in significant fluctuations and a record sales volume of $8.84 billion by year’s end. Beginning the year with strong momentum, the NFT market experienced a bullish phase in the first quarter, with trading sales volumes surpassing $4.1 million, driven primarily by the revival of Bitcoin-based NFTs.
As the year progressed, the NFT landscape encountered a downward shift. In April, trading volumes fell to $1.2 billion, a decrease of approximately $205 million from March. This downward trend continued into May, resulting in a further reduction to $599 million, and by June, the market saw a substantial decline, reaching $436 million in trading sales. The decline persisted into the third quarter, where month-over-month figures dropped to $428 million in July, $393 million in August, and ultimately $303 million in September, leading to a cumulative total of $1.12 billion for Q3 2024. This downturn was partly attributed to increasing scrutiny from regulatory bodies, notably following a wells notice issued by the United States Securities and Exchange Commission (SEC) to OpenSea—a prominent NFT marketplace—asserting that its NFTs were classified as securities.
Despite the setbacks in Q3, the NFT market rebounded in the fourth quarter, regaining traction with sales of over $350 million in September following the re-election of Donald Trump. The market experienced a surge in November, with sales surpassing $500 million, and reached nearly $1 billion in December. This aggressive recovery brought the total sales volume for 2024 to $8.84 billion, surpassing the previous year’s figures by more than $130 million.
Looking ahead to 2025, market analysts are predicting a potential resurgence. January is traditionally a peak period for NFT trading, and experts, including Yat Siu, co-founder of Animoca Brands, suggest an upcoming bull run that could exceed the highs of 2021 and 2022, which featured monthly volumes between $1 billion and $6 billion. Siu mentioned in a recent interview that it is likely the NFT market will "retest another bull run even bigger” than previous cycles.
Several factors are anticipated to drive this potential recovery, with the political landscape and advancements in artificial intelligence (AI) cited as primary influences. The re-election of Donald Trump is regarded as a significant variable, with expectations that his administration will foster a more crypto-friendly regulatory environment. Trump has previously shown support for cryptocurrencies, launching an NFT collection in 2022 that featured 45,000 units on the Polygon network while promoting aspirations to establish the United States as the “crypto capital of the world”.
Concurrent with political developments, the rise of AI technologies is expected to significantly impact the NFT market. The introduction of AI agents—tech that can facilitate NFT trading, provide personal assistance, and operate within online marketplaces—signals a transformative shift that may enhance market engagement. The potential for further innovations in AI, along with the introduction of new blockchain networks such as Berachain, Monad, Abstract, and Sonium, may further energise the NFT sector.
Additionally, several high-profile NFT projects have announced impending token airdrops, creating further interest within the market. As such, market analysts remain optimistic about the interplay of these dynamics leading to a resurgence in NFT trading in early 2025, with Bitcoin predictions suggesting that the cryptocurrency could skyrocket beyond $150,000, further stimulating investment in NFTs and related digital assets.
Source: Noah Wire Services