NFT Market Struggles Amid Crypto Downturn, But AI-Powered Assets Spark Interest
NFT trading volumes saw a dramatic decline of over 60% in February compared to December, with the fall aligning with a downturn in the broader cryptocurrency market.
December’s trading volume had peaked at $1.36 billion but dropped 26% in January and another 50% by February, as reported by DappRadar analyst Sara Gherghelas on March 6.
Despite a promising finish to 2024, the NFT market’s momentum slowed sharply in the early months of 2025. Gherghelas pointed out that this downturn was closely tied to the broader fluctuation in crypto prices.
Throughout the second half of 2024, NFT trading had been rising steadily, coinciding with a surge in the overall cryptocurrency market, which reached a peak of $3.71 trillion in market capitalization on December 9. Bitcoin itself had briefly surpassed $109,000 in January, setting a new all-time high. However, these gains faded quickly by February due to growing concerns about the economic impact of US tariffs.
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Meanwhile, decentralized applications (DApps) also showed signs of slowdown in February, with daily unique wallet activity dipping by 8%. However, NFT activity saw a slight uptick, increasing by 6%, with 3.5 million users interacting with NFT platforms. The rise in AI-powered NFTs signals a shift toward more interactive and practical digital assets, with Gherghelas predicting that NFTs with genuine utility will pave the way for long-term growth in Web3 adoption.
Notably, profile picture NFTs led the way in February, bringing in $243 million from 76,385 sales. Gaming NFTs followed, generating $41 million and 421,853 trades, while sports NFTs accounted for $7.7 million in volume and 659,097 transactions.
Despite a rough 2024, when NFT trading volumes plummeted to $13.7 billion, well below the 2022 peak of $57.2 billion, the market’s shift toward NFTs with real-world applications and functionality remains a key factor in its potential for growth.
Alexander Stefanov
Reporter at CoinsPress
Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over five years of experience covering the industry, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics - stay ahead of the curve with CoinsPress.
