Author: Ezra Reguerra, CoinTelegraph; Compiler: Deng Tong, Golden Finance
Despite some major setbacks for the asset class, non-fungible tokens (NFTs) remain an integral part of the Web3 landscape in 2024. Industry commentators and professionals insist that NFTs’ utility remains intact, fueling optimism for a recovery.
While the media occasionally declares NFTs dead, holders continue to trade them, with data tracker CryptoSlam showing that NFTs are worth about $8.5 billion in sales this year.
Sales may be lower than in previous years, but the number of buyers increases 62% from 4.6 million in 2023 to 7.5 million in 2024. This is also 37% higher than the 5.4 million unique buyers recorded in 2022, a year widely considered to be the peak of NFTs. So while trading volumes may be down, demand for the asset class is still growing.
Despite the space’s continued presence, it’s undeniable that NFT holders have taken a beating this year, from seven straight months of declines and major projects exiting the space to the SEC issuing Wells notices to NFT projects.
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 a “bottom line” for NFTs, while another said it was “another stain” on the industry.
Some questioned the decision to remove the feature, arguing that it provided real utility to users and raised issues with bot accounts and scammers. One community member said that 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 it would shut down its NFT marketplace, citing unclear U.S. regulation.
A similar move was made in July by U.S. gambling company DraftKings, which shut down its NFT business, including its Reignmakers series and marketplace, citing "legal developments."
In addition, 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.
The SEC has increased its focus on NFTs in 2024. On August 28, OpenSea CEO Devin Finzer said in an X post that the securities regulator issued a Wells notice to the NFT trading platform.
A Wells notice is a formal notice issued by the SEC indicating that it is considering taking enforcement action against an entity. The notice indicates that the agency has completed its investigation and found evidence of possible violations of securities laws.
Finzer said the SEC accused NFTs on OpenSea of being considered unregistered securities. The executive said the market is ready to fight any enforcement action by the agency, adding that the SEC's targeting of NFTs will "stifle innovation" on a larger scale, putting artists and creatives at risk.
On December 16, NFT platform CyberKongz received a 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,” saying tokens couldn’t be used in blockchain games without being registered as securities. CyberKongz said the SEC’s stance could have far-reaching implications for blockchain gaming and pledged to dispute the charges.
NFT sales reflected broader challenges in 2024. March saw the highest monthly sales of $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 trading volume also fell from 7.3 million in August to 4.9 million in September.
After the market hit its lowest point, NFTs reversed course in October, growing 18% with sales of approximately $356 million. Solana-based NFTs also hit an all-time sales milestone of $6 billion in October.
November was even stronger, with monthly NFT sales reaching $562 million, a six-month high. Later in the year, a resurgence in NFT assets was once again driven by Ethereum, Bitcoin, and Solana collectibles.
While some may have given up on NFTs, professionals working in the space have various theories about their possible return.
NFTs may return in a different form, RARI Foundation head of strategy Jana Bertram said in an episode of the Hashing It Out podcast, acknowledging that trading volumes have dropped but arguing that the technology still has value.
Bertram believes NFTs can expand beyond digital art and collectibles to real-world applications such as identity verification, ownership records, and healthcare documentation.
When asked about the outlook for Bitcoin NFTs in 2025, OKX Global Chief Commercial Officer Lennix Lai said the assets are entering a new phase of growth. He shared that their trading data reflects a recovery, with Ordinals trading volumes up 55% from October to November. He said:
“We are seeing encouraging signs of adoption – from JVRN, the first Bitcoin-backed jewelry brand to launch the Ordinals collection, to other high-profile artists choosing to have their work engraved 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 foundations and broader market tailwinds, we believe the Bitcoin NFT movement is still in its early stages and has huge growth potential in the future,” said Lai.
Meanwhile, Animoca Brands Executive Chairman Yat Siu noted that the NFT market will become even bigger than it already is 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 that's true, then everything will be fine. That means that at the current market volume for NFTs, I think its monthly trading volume will exceed billions of dollars because the entire market is growing."
Fret not if you missed this particular listing - with Solana's price soaring above $70, there continues to exist plenty of opportunities for the discerning airdrop hunter.
AlexThe alpha version is expected to launch before April 2024, providing players, including NFT holders and toy owners, with both narrative-driven and open-ended gameplay options.
AlexPreviously, investigations were primarily focused on money laundering- but now
AlexChina and Singapore forge a groundbreaking alliance, piloting the use of digital yuan for cross-border tourism, showcasing the global embrace of this innovative currency.
Hui XinThe substantial funding, predominantly provided by M&G Investments, is expected to support GFO-X through its upcoming launch and drive future innovation within the regulated digital asset sector.
AlexIn a recent Roundtable discussion, anchor Rob Nelson and TheStreetCrypto's Peter Chawaga delved into the pivotal trends steering near-term crypto price movements. These encompassed imminent spot bitcoin exchange-traded funds (ETFs), Elon Musk's influence, national adoption of digital currencies, and the burgeoning relationship between AI and blockchain technology.
JoyThe application's disclosure, through a notice in The Straits Times on December 7, signals escalating tensions within Cake Group.
BrianCardano's latest report reveals robust growth with 79.7 million transactions, the development of 1,307 projects, and the circulation of 9.1 million native tokens, highlighting its expanding influence in the blockchain ecosystem.
YouQuanPreviously, the company had frozen wallets linked to terrorism and warfare in Ukraine and Israel
AlexUS Senators introduce the Terrorism Financing Prevention Act, aiming to combat cryptocurrency's role in funding terrorism, prompted by the October Hamas attack on Israel.
Hui Xin