The NFT market experienced a significant downturn in 2024, marking its poorest performance since 2020, according to the latest Dapp Industry Report by DappRadar.
This decline was characterized by a 19% drop in trading volumes to $13.7 billion and an 18% fall in sales counts, totaling just under 50 million transactions for the year.
The year started with a promising increase, as trading volumes in the first quarter rose 4% to $5.3 billion. However, this momentum was not sustained, with volumes plummeting to $1.5 billion in the third quarter before a modest rebound to $2.6 billion in the fourth quarter.
The overall decrease in sales counts suggests that NFTs became generally more expensive in 2024, aligning with rising token prices, particularly for Ether. This price hike contributed to the reduced transaction volume, as the higher costs likely deterred potential buyers.
Gaming NFTs: A Dominant but Declining Segment
Despite the overall downturn, gaming-related NFTs continued to dominate the market in terms of sales counts. Epic Games’ Gods Unchained led this segment with $152 million in sales volume, although this was down 27% from the previous year, and 3.86 million sales, marking an 18% decline.
On a more positive note, Pudgy Penguins emerged as the top NFT collection by trading volume, which soared over 140% from the previous year to $786 million. This increase was accompanied by a 114% rise in the collection’s floor price.
Despite a 44% fall in sales count, the collection’s success was buoyed by its expansion into real-life utilities, including plush toys available in major retailers like Walmart and Selfridges, a mobile game, and sports partnerships.
Market Outlook Amidst Crypto Revival
The NFT market’s struggle contrasts with a rejuvenated cryptocurrency market, led by a 125% increase in Bitcoin’s value over the year. This disparity underscores the unique challenges and opportunities within the NFT sector, which had its most successful year in 2022.