According to a DappRadar analysis, the non-fungible token (NFT) market had a difficult year in 2024, with sales and trading volumes falling by about 20% from the year before, the lowest performance since 2020. Rising token prices and increased volatility were the main causes of this drop, which had an impact on the NFT market as a whole.
NFT Sales Decline and Trading Volumes
According to DappRadar’s 2024 Dapp Industry Report, which was released on January 14, NFT trading volumes decreased 19% year over year to $13.7 billion, while sales transactions decreased 18% to slightly under 50 million. According to the research, the NFT sector had “one of the worst-performing years since 2020” in 2024.
Volatility Is Evident in Quarterly Trends
Throughout the year, there were noticeable swings in the NFT market. Compared to the first quarter of 2023, trading volumes increased by 4% to $5.3 billion. But this impetus soon waned, as Q3 sales fell to $1.5 billion before slightly increasing to $2.6 billion in Q4. These changes brought attention to the market’s volatility and the effect that growing token values are having on sales.
NFT Prices Rise Despite Falling Sales
NFTs have typically gotten more expensive, especially in light of growing token prices, especially for Ether (ETH), as seen by lower sales figures than in 2023. The overall decline in transaction volumes and sales count throughout the course of the year was a result of rising costs.
NFTs Are Having Trouble Recovering with the Crypto Market’s Comeback
NFTs were unable to fully recover even though the cryptocurrency industry recovered, driven by Bitcoin’s 125% increase in 2024. The gap between NFTs and the larger market highlighted the industry’s continuous problems. Bitcoin’s rise, on the other hand, signaled a successful year for the cryptocurrency and brought to light the sharp differences between various blockchain segments.
NFTs for Gaming Rule the Market
The dominance of gaming-related NFTs, especially in terms of sales volume, was also mentioned in DappRadar’s study. With $152 million in sales, Epic Games’ trading card game Gods Unchained led the gaming industry, despite a 27% drop from the year before. Furthermore, there was an 18% decline in the game’s total sales.
A Unique Addition to NFT Collections: Pudgy Penguins
Pudgy Penguins was the best-performing NFT collection in terms of trade volume. The collection’s trade volume increased by an astounding 140% to $786 million, while its floor price increased by 114%. Due to practical uses, such as the introduction of plush toys at well-known stores like Walmart and Selfridges, as well as collaborations with mobile games and sports, Pudgy Penguins survived a 44% drop in sales.
Practical Use Is Important
The performance of the NFT industry in 2024, according to DappRadar, supported the notion that NFTs with observable practical utility continue to do better. According to the paper, NFTs are vital even though they are not always costly because of their wider applicability inside the Web3 ecosystem, rather than their high price tags.
