NFT Market Cap Nosdives During Broad Crypto Sell-Off

The NFT market cap has fallen below $1.5 billion. That's a return to pre-2021 boom levels, according to CoinGecko data. The decline comes amid a broader crypto market crash. Total crypto market cap plunged from $3.1 trillion to $2.2 trillion in roughly two weeks. NFT valuations got dragged down with it.

Bitcoin's price tumbled from $89,000 to $65,000 during this period. Ether dropped from $3,000 to $1,800, according to CoinGecko. The price collapse in these two major cryptocurrencies weakened the foundation of the largest NFT ecosystems. It's exposing the sector's dependence on overall crypto market sentiment.

The retreat reflects deeper structural problems. Short-term price volatility isn't the only issue. CryptoSlam data shows NFTs in circulation reached nearly 1.3 billion in 2025. That's a 25% increase from 2024. Total NFT sales fell 37% year-over-year to $5.6 billion. Average NFT sale prices have dropped below $100. The market's now defined by high volume but low prices.

The oversupply stems partly from reduced barriers to minting and issuing NFTs. Creators flooded the market. But buyer participation and spending failed to keep pace. That eroded overall market value and liquidity. The result? A fundamental mismatch between expanding supply and shrinking demand.

Major corporate and platform exits underscore the severity of the downturn. Nike reportedly sold off RTFKT, the digital collectibles studio it acquired during the NFT boom. The company shut down the unit amid an investor lawsuit. Significant marketplace closures are accelerating. Nifty Gateway, one of the earliest NFT platforms, is transitioning to withdrawal-only mode. It's shutting down in February. Social NFT platform Rodeo will move to read-only status. It closes in March.

Falling crypto prices, oversupply, and brand retreats are converging. NFTs are entering a deep consolidation phase. The market's reversion to pre-hype capitalization raises questions. Long-term demand for speculative profile-picture projects? Unclear. More durable use cases like gaming, ticketing, and digital art patronage might fare better.

Platform closures and corporate asset sales may clear weaker players from the market. But they also risk damaging user trust. Institutional appetite for future NFT experiments could take a hit. Can the sector rebuild around sustainable utility rather than speculation? That remains an open question. The shakeout continues.