In 2024, the non-fungible token (NFT) market experienced its most challenging year since 2020 in terms of trading volume and sales, according to a recent DappRadar report.
The report, released on January 14, highlighted a significant decline in NFT trading volumes which fell by 19% from 2023 to $13.7 billion. Meanwhile, sales counts decreased by 18% to just under 50 million, marking 2024 as one of the poorest-performing years since the NFT inception in 2020.
The report described the year as volatile for NFTs. Although trading volumes in the first quarter saw a 4% increase to $5.3 billion compared to Q1 2023, the growth was unsustainable. Volumes plummeted to $1.5 billion in Q3 before a minor recovery to $2.6 billion in Q4. This represented a substantial decline from previous years. The data reflects that even as tokens became more costly, evidenced by rising prices of key assets like Ethereum, sales counts did not improve.
While the overall cryptocurrency market, spearheaded by Bitcoin's 125% rise, showed revitalization in 2024, the NFT sector struggled. A look back reveals 2022 as a breakout year for NFTs, with unprecedented trading volumes totaling $57.2 billion and sales counts reaching 121.7 million. The NFT trading volume in 2024 was consequently down by 76% compared to the 2022 peak.
Despite the challenges, certain sectors within the NFT space remained resilient.
The report indicated gaming-related NFTs as the frontrunners in collections by sales count. Notably, Epic Games’ "Gods Unchained" led the gaming NFT category with $152 million in sales volume, though this was a 27% decline from the previous year, accompanied by an 18% drop in sales to 3.86 million.
In contrast, Pudgy Penguins emerged as the top NFT collection by trading volume, rising over 140% from 2023 to $786 million. Despite a 44% drop in sales count, the collection's floor price saw a substantial 114% increase. The success was partly attributed to initiatives like launching plush toys in major outlets including Walmart and Selfridges and developing a mobile game, underscoring the viability of NFTs with tangible utility.
The DappRadar report reflected that perhaps 2024 was a pivotal year in understanding that the value of NFTs need not rest solely on high prices but more on their role within the broader Web3 ecosystem.