NFT Challenges and Recovery 2024

Key Challenges for NFTs in 2024

1. Decreasing Support:
   • Social media platform X removed NFT integration for profile pictures in January.
   • GameStop closed its NFT marketplace, citing regulatory uncertainty.
   • DraftKings, Immutable, and Kraken also shut down their NFT marketplaces later in the year.
2. Regulatory Pressure:
   • The SEC issued Wells notices to major NFT entities, including OpenSea and CyberKongz.
   • OpenSea faced allegations of offering unregistered securities.
   • CyberKongz was scrutinized for its token use in blockchain gaming.
3. Market Downturn:
   • NFT sales volumes dropped for seven consecutive months, hitting a record low in September.

Signs of Recovery

After a tough year, NFTs started to show some signs of recovery in October and November:

• October saw sales increase by 18% due to Ethereum, Bitcoin, and Solana-based NFTs.
• Sales in November reached $562 million, the highest in six months.

Predictions for 2025

Experts believe NFTs will evolve and expand into new use cases:

• Broader Applications:
  Jana Bertram of RARI Foundation suggests NFTs could extend into areas like identity verification and healthcare.
• Bitcoin NFTs:
  OKX’s Lennix Lai noted a 55% increase in Bitcoin Ordinals trading volume from October to November. He predicts significant growth for Bitcoin-based NFTs.
• Market Growth:
  Yat Siu of Animoca Brands thinks NFTs will have an even better year than 2021 and 2022, especially in Web3 gaming.

While 2024 was a tough year for NFTs, the industry has shown resilience. A focus on innovation and practical applications could drive their revival in 2025. Industry leaders remain optimistic, pointing to the untapped potential of NFTs in gaming, identity, and ownership solutions.