January 16, 2025
With $155 Million in Sales Last Week, Here's One Crypto Comeback You Weren't Expecting
Dear Subscriber,
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| By Jurica Dujmovic |
Digital ownership is a hot topic.
That’s because copyright is difficult to enforce, even in the best-case scenario. Add in the ever-evolving digital landscape and the rapidly developing AI industry and it can feel impossible to enforce ownership of digital assets.
My colleague Mark Gough introduced the latest web3 approach to tackle this massive challenge yesterday. But I want to take a step back and look at a previous attempt.
I’m talking about non-fungible tokens, or NFTs.
Back in 2021, everyone and their crypto-savvy grandmother was trying to mint the next million-dollar NFT.
Those wild west days of digital art speculation seem like ancient history now. As the last bull market began to wind down, so too did the NFT craze.
Looking at the numbers through the end of 2024, the story becomes clear: While annual NFT sales reached $8.8 billion — a modest 1.1% increase from 2023 — trading volumes and sales counts actually dropped to their weakest levels since 2020.
Not only that, but major players announced the closure of their NFT marketplace.
Take Kraken, for example. Users have until Feb. 27, 2025, to withdraw their assets off the centralized exchange and into self-custody wallets before they’re lost forever.
Even the once-mighty Yuga Labs saw its flagship collections Bored Ape Yacht Club and Mutant Ape Yacht Club hit historic lows. Their floor prices have dropped to 14.7 ETH and 2.46 ETH, respectively.
Today, the market is largely consolidated around three main chains. Ethereum (ETH, “A-”) and Bitcoin (BTC, “A”) are neck-and-neck at $3.1 billion each, while Solana (SOL , “B”) claimed a respectable $1.4 billion slice of the pie.
But don’t be too quick to see these as signs of a dying market, though. They aren’t.
Rather, these are just the growing pains of an industry finding its footing.
That’s because as AI and web3 projects stole the spotlight in this bull run, the NFT landscape has evolved into something far more interesting — and potentially more valuable — than just pixelated avatars selling for eye-watering sums.
How can I tell?
By looking at how the market values NFTs today.
Some projects continue to see sustained success. Pudgy Penguins, for example, demonstrated remarkable resilience throughout 2024, generating approximately $244.3 million in total sales. And CryptoPunks has proved its endurance, with its latest smash success coming in the form of a rare seven-trait punk being accepted as collateral for a $2.75 million loan in November 2024.
These aren’t outliers, but rather indicators that the market is now able to differentiate between hype and genuine value.
That means the days of JPEG-fueled dreams of instant riches are long gone. And it is much harder to find success with mere digital art. With approximately 98% of collections now seeing minimal trading activity, the "mint it and they will come" era has faded into crypto history.
Instead, we’ve seen something more interesting emerge: NFTs with actual utility.
And it’s why I believe there is more ahead for this $8.8 billion market.
Last year, I wrote about how the most exciting developments were happening at the intersection of digital and physical worlds. I said that real-world asset tokenization would continue to gain momentum.
That prediction has held true through 2025.
Real estate, precious metals and traditional art continue to be tokenized at an accelerating pace to make previously illiquid assets as tradeable as stocks.
Using the narrative tracker tool my colleague Dr. Bruce Ng introduced to you, we can see that the RWA narrative has seen a 60% increase in price performance over the past 90 days.
It’s through combining with the RWA narrative that NFTs will continue into the future.
Today's successful NFT projects must be digital Swiss Army knives to stand out. They offer everything from exclusive access passes to real-world event tickets and fractional ownership of physical assets to automated royalty systems for artists.
The gaming industry has emerged as a natural testing ground for this digital-physical convergence.
FIFA, for example, is about to enter the space with its FIFA Rivals, a mobile football game incorporating NFTs set for release in summer 2025.
This evolution has rippled through the entire ecosystem to fundamentally change how NFT marketplaces operate.
Traditional marketplace giants like OpenSea have faced fierce competition from aggressive challengers. Blur is a big one. It has captured significant market share through its zero-fee trading and innovative airdrop campaigns.
This competitive pressure hasn't just sparked a race to the bottom on fees. It’s also fostered an era of specialized platforms, each catering to specific niches within the broader NFT ecosystem.
It has also spurred marketplaces to focus on user experience. They have recognized that mainstream adoption requires interfaces to be more user-friendly and just as intuitive as traditional financial applications.
Which also means allowing NFTs to be represented across networks has also risen as a priority.
Remember, I mentioned that NFTs have mostly consolidated to one of the big three blockchains — Ethereum, Solana and Bitcoin. Bridging protocols and wrapped token standards now allow NFTs to be represented across these networks.
And while early NFT platforms primarily facilitated buying and selling, today's ecosystem supports more sophisticated financial instruments, thanks to smart contracts. One such functionality is automated royalty distributions. These ensure creators receive ongoing compensation to NFT-collateralized lending services, like in the $2.75 million CryptoPunk loan I mentioned earlier.
This technical evolution mirrors the broader market transition from speculation to utility.
The underlying NFT infrastructure now enables seamless integration between digital and physical assets to support everything from fractional real estate ownership to tokenized artwork.
What I’m describing goes beyond technical progress. It’s a fundamental transformation for NFTs from speculative digital collectibles into practical tools for ownership, investment and value transfer.
As the market continues to consolidate around genuine utility over artificial scarcity, these technological advances are making NFTs increasingly accessible to everyday users. And they also support more sophisticated applications for established players.
So, while the initial gold rush may be over, this isn’t the end for NFTs. Far from it.
For those looking to build or harvest genuine value in the NFT space, the real work is just beginning.
The comeback is coming. And I’ll be following every twist and turn along the way.
Best,
Jurica Dujmovic
P.S. NFTs have come a long way since the last bull market. And so has one other sector: DeFi.
The world of decentralized finance has flourished over the past few years. And now, with the first pro-crypto administration set to enter the White House, many in the community believe even more is on the horizon.
Already, my colleague and DeFi expert Marija Matić has been able to target insane DeFi yields of 101% ... 912% ... even 1,168% in 2024. And that’s with the laundry list of restrictions for U.S. residents when it comes to DeFi opportunities. I can’t imagine what she’ll be able to find should restrictions open up.
That’s why I urge you to watch Marija’s recent Superyield Income Summit.
In it, she’ll explain how she finds these incredible yields. And she’ll show you how you can do the same … before the TradFi institutions get in.
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