NFT market cap retreats to early 2021 valuations near $1.5B threshold
The non-fungible token industry has witnessed its market value plummet to early 2021 figures amid widespread platform closures and major companies abandoning the space.
The worldwide non-fungible token (NFT) industry has dropped beneath the $1.5 billion threshold in overall market capitalization, sliding back to valuation benchmarks not witnessed since prior to the sector's explosive growth phase that began in 2021.
This pullback occurred in tandem with a wider cryptocurrency market decline that has persisted throughout the last two weeks, according to information from CoinGecko. The aggregate crypto market capitalization registered approximately $3.1 trillion on Jan. 23, subsequently declining to $2.2 trillion by Friday.
Leading cryptocurrencies such as Bitcoin (BTC) experienced a descent from approximately $89,000 down to roughly $65,000, whereas Ether (ETH) tumbled from $3,000 to approximately $1,800 during this identical period. Bitcoin and Ethereum represent the two dominant blockchain networks for NFTs when measured by 30-day trading volume, based on data from NFT analytics platform CryptoSlam.
The decline in NFT market capitalization arrives on the heels of numerous prominent closures and withdrawals, underscoring the ongoing contraction afflicting the sector.
Expanding supply meets diminishing demand pressures
The market correction has been intensified by an increasing mismatch between the supply of NFTs and purchasing appetite from buyers.
According to Cointelegraph's reporting from Dec. 31, aggregate NFT supply maintained its upward trajectory even while sales volumes and pricing experienced declines, creating a high-volume, low-price market configuration.
Information from CryptoSlam indicated that the quantity of NFTs available in the market climbed to approximately 1.3 billion throughout 2025, representing a 25% increase when compared to 2024. Meanwhile, total NFT sales experienced a 37% year-over-year contraction to $5.6 billion, and average transaction prices dropped to levels under $100.
This diverging pattern indicates that although minting processes became more affordable and obstacles to creation decreased, buyer engagement and expenditure levels were unable to maintain pace.
Major company departures and marketplace shutdowns intensify downturn
The market capitalization decline comes after a succession of prominent withdrawals that reflect the broader market retreat. On Jan. 7, athletic apparel powerhouse Nike discreetly divested RTFKT, the digital collectibles venture it purchased during the peak of the NFT market frenzy.
The disposal reportedly came after the corporation's decision to terminate operations while facing an investor lawsuit.
Additionally, marketplace closures have gained momentum. Nifty Gateway, among the pioneering NFT trading platforms, announced its closure scheduled for Feb. 23 and has transitioned into withdrawal-only functionality. The marketplace, owned by Gemini, attributed an extended market downturn as the reason for winding down operations.
On Jan. 28, social-focused NFT platform Rodeo revealed plans to discontinue operations following unsuccessful attempts to achieve sustainable scaling. Rodeo indicated it would shift to read-only functionality prior to completely shutting down in March.