NFTs have endured one of their weakest years of trading and sales since 2020

Despite a broad rally in the digital asset industry, the non-fungible token (NFT) market appears to have made significant gains over the past year.

In fact, the NFT market experienced its weakest performance in 2024 since 2020.

NFTs face major hurdles in 2024

According to Dapradar's latest edition of the ‘DAP Industry Report', despite an initial increase in transaction volumes, reaching $5.3 billion in the first quarter, the NFT market has struggled to maintain this momentum. While there was a partial recovery to $2.6 billion in the fourth quarter, volumes fell sharply to $1.5 billion in the third quarter.

This volatility was accompanied by a decrease in sales numbers compared to 2023, which suggests that NFTs will be sold at higher prices, possibly due to the value of tokens such as ETH. Overall, the year saw a 19 percent decrease in transaction volume and an 18 percent decrease in sales.

“NFTs had one of the weakest years since 2020, both in terms of trading volume and volume of sales. Maybe the year 2024 helped us realize that NFTs don't need to be expensive to prove their worth in the wider Web3 ecosystem.

Interestingly, the gaming sector has emerged as the dominant force in NFT sales, as indicated by the leading collections in the sales count. This trend highlights the growing integration of NFTs in the gaming industry, which facilitate real ownership of digital assets and player-driven economies. It's where they advertise.

Blur vs OpenSea

Blur held the position as the leading NFT market for most of 2024 except for the third quarter. In the fourth quarter, Blur and OpenSea were closely tied in market share. The rise of blurbs has been fueled by strategic weather campaigns and a zero-fee marketing policy that attracts cost-conscious merchants.

But OpenSea had a challenging year. The US Securities and Exchange Commission (SEC) issued a notice to OpenSea in August 2024, raising concerns about unregistered securities. This regulatory pressure, combined with the market downturn and intense competition, prompted OpenSea to announce a significant strike in November, which reduced the workforce by 56%.

The company is now focusing on “OpenSea 2.0”, showing signs of a token launch to reclaim the season.

Meanwhile, Magic Eden outperformed OpenSea. Initially a Solana-focused platform, Magic Eden has expanded to support Ethereum, Polygon, Bitcoin, and new networks like Base and Arbitrum. On December 10, 2024, Magic Eden launched the ME token and conducted a $700 million airdrop to strengthen its ecosystem.