NFTs in 2024: Surviving challenges, embracing growth, eyeing the future

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As a seasoned crypto investor with a decade-long journey through the digital asset landscape, I’ve witnessed the ebb and flow of various trends, and non-fungible tokens (NFTs) are no exception. After reading this comprehensive analysis, I find myself optimistic about NFTs’ future despite the challenges they faced in 2024.

As a researcher delving into the dynamic world of Web3 technology in 2024, I’ve observed that Non-Fungible Tokens (NFTs) continued to play a pivotal role, despite encountering significant challenges within their asset class. The assurance from industry analysts and experts is unwavering – the value proposition of NFTs persists, fostering anticipation for a resurgence in the sector.

Despite some media reports suggesting the demise of NFTs, enthusiasts remain active in trading, with data from CryptoSlam indicating around $8.5 billion worth of NFT sales have been recorded so far this year.

Despite a potential decrease in sales volume compared to past years, the number of buyers significantly rose by approximately 62%, from 4.6 million in 2023 to 7.5 million in 2024. This increase represents a 37% jump over the 5.4 million unique buyers recorded in 2022 – a year that was considered the pinnacle of NFT popularity. Therefore, while sales might be declining, it’s clear that there is still an expanding interest in this asset class.

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Despite the persistence of the NFT market, it’s clear that many NFT holders have experienced significant losses this year. This is due to a prolonged seven-month decline, the departure of several key projects from the space, and the U.S. Securities and Exchange Commission issuing Wells notices to various NFT projects.

NFT projects faced numerous setbacks throughout 2024

In January, the social media site X ceased to support Non-Fungible Tokens (NFTs), a service they had offered to paid subscribers for a year, allowing them to attach them to their profile pictures. One user labeled this move as the “death knell” for NFTs, while another referred to it as another setback or “black eye” for the industry.

Others debated the wisdom behind eliminating the feature, stating that it was beneficial for users as it offered genuine value, and raised concerns about bots and fraudsters. A community member pointed out that NFT profile pictures enabled users to verify the authenticity of those they were communicating with.

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The same month, video game retailer GameStop announced it would shut down its NFT marketplace, blaming the lack of regulatory clarity in the US. 

In a comparable move last July, DraftKings, an American gambling firm, halted operations for its Non-Fungible Token (NFT) sector, which encompassed their Reignmakers collections and marketplace. They attributed this decision to ongoing “legal issues.

Furthermore, the NFT marketplaces operated by Immutable (a layer-2 blockchain) and Kraken (a cryptocurrency exchange) ceased operations in August and November, respectively.

By January 2025, the NFT project owned by Nike, RTFKT, will cease its activities, as they announced in December.

SEC hands out Wells notices to NFT entities

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In my role as an analyst, I found myself focusing on the significant shift in the Securities and Exchange Commission’s (SEC) attention towards Non-Fungible Tokens (NFTs) in 2024. To be more specific, on August 28th, the CEO of OpenSea, Devin Finzer, announced via a post that the SEC served us with a Wells notice – a formal warning signaling potential enforcement action against our NFT trading platform.

A Wells Notice is essentially a formal letter from the Securities and Exchange Commission (SEC), suggesting they may take legal action against a certain organization. This letter signals that the SEC has concluded an investigation, uncovering proof of suspected violations of securities regulations.

According to Finzer, the SEC claims that some Non-Fungible Tokens (NFTs) on OpenSea might be considered unregistered securities. The executive stated that they are prepared to challenge any regulatory actions by the agency, also mentioning that such action from the SEC could potentially suppress broader innovation in NFTs, potentially endangering artists and creatives.

December 16th saw the NFT platform CyberKongz receiving a Wells notice from the Securities and Exchange Commission (SEC). According to the CyberKongz team, this matter originated from their sale of Genesis Kongz NFTs in the year 2021.

The project was told by the SEC that they consider the use of a token in a blockchain game as requiring registration as a security, which they found troubling. CyberKongz responded that this stance from the SEC could have significant effects on the future of blockchain gaming and vowed to challenge these accusations.

NFT faced a seven-month downturn in 2024

2024’s overall difficulties were reflected in the sales volumes of Non-Fungible Tokens (NFTs), as March recorded the peak monthly sales amounting to $1.6 billion. The surge was primarily fueled by NFT transactions on Ethereum, Bitcoin, and Solana – the three most widely used blockchains for digital collectibles.

Nevertheless, the market showed a consistent downward trend and hit an all-time low in September, marking the first time monthly sales dipped below $300 million since 2021. Additionally, NFT transactions also witnessed a decrease, dropping from 7.3 million in August to 4.9 million in September.

Following the market’s bottom, NFTs underwent a turnaround in October, experiencing a surge of 18%, resulting in approximately $356 million worth of sales. Additionally, October marked a significant achievement for Solana-based NFTs, surpassing a total of $6 billion in all-time sales.

In November, there was an enhanced showcase of NFT sales, marking a six-month high with a total of $562 million transacted. This surge in NFT market activity was once more fueled by popular collections on platforms like Ethereum, Bitcoin, and Solana towards the end of the year.

NFT predictions for 2025

Despite some people abandoning Non-Fungible Tokens (NFTs), experts actively engaged in the field are brainstorming possibilities for their potential resurgence.

Jana Bertram, who leads strategy at RARI Foundation, shared during an episode of CryptoMoon’s ‘Hashing It Out’ podcast, that it is expected NFTs may reappear in a new shape. She conceded that trading activity has dwindled, yet she emphasized the continued value of the underlying technology.

Bertram thinks that NFTs (Non-Fungible Tokens) could extend beyond just digital art and collectibles, finding usefulness in areas such as identity verification, property records, and health records.

Lennix Lai suggested that Bitcoin NFTs are experiencing a new period of growth, as indicated by a substantial boost in trading activity observed between October and November.

“We’re seeing encouraging signs of adoption – from JVRN, 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 CryptoMoon that NFTs (Non-Fungible Tokens) will expand beyond their size in 2021 and 2022. He suggested that as the cryptocurrency markets continue to grow, all parts within the Web3 sector are expected to increase proportionately.

“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 further mentioned that as more individuals jump on the Bitcoin (BTC) bandwagon, they will eventually stumble upon NFTs and their practical uses. He explained that while Bitcoin serves as a reliable form of value storage, NFTs offer functionalities within Web3 gaming. In his words, “NFTs are set to increase in popularity. Naturally, the token economies associated with them will also flourish.

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2024-12-23 14:02