The global non-fungible token (NFT) sector slipped below $1.5 billion in total market capitalization, returning to levels seen before the 2021 boom. The decline accompanied a broader crypto pullback over the past two weeks, with CoinGecko data showing total crypto market cap falling from about $3.1 trillion on Jan. 23 to roughly $2.2 trillion by Friday.
Major assets also weakened: Bitcoin (BTC) slid from around $89,000 to about $65,000, and Ether (ETH) fell from near $3,000 to about $1,800 in the same period. Bitcoin and Ethereum remain the top two networks for NFTs by 30‑day trading volume, according to NFT data aggregator CryptoSlam. The NFT market cap contraction follows several high‑profile closures and exits that underscore the sector’s continued shrinkage.
Rising supply collides with falling demand
The reset has been driven in part by an increasing imbalance between NFT supply and buyer demand. Total NFT supply continued to expand even as sales and prices declined, pushing the market toward a high‑volume, low‑price structure. CryptoSlam reported nearly 1.3 billion NFTs in circulation in 2025, a 25% increase versus 2024. Total NFT sales dropped 37% year‑over‑year to $5.6 billion, while average sale prices fell below $100.
The divergence suggests minting became cheaper and barriers to issuance eased, but buyer participation and spending did not keep pace.
Corporate exits and platform closures add pressure
Several notable retreats have added strain. On Jan. 7, Nike quietly sold RTFKT, the digital collectibles studio it bought at the NFT market’s peak, after deciding to wind down operations amid an investor lawsuit. Marketplace shutdowns have accelerated: Nifty Gateway announced it will close on Feb. 23 and moved to withdrawal‑only mode, citing a prolonged market downturn. On Jan. 28, social NFT platform Rodeo said it would cease operations, transition to read‑only mode and fully shut down in March after failing to scale sustainably.
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