Analysts expect the future market to fluctuate with cryptocurrency trends.
Written by: Denis Omelchenko, Anna Akopian
Translated by: Tom, Mars Finance
As 2024 comes to a close, December's non-fungible token (NFT) sales surged to $877 million, making it the second-best month of the year.
Blockchain-based digital collectibles performed strongly in December, with sales reaching $877 million, marking it as the second-best month of 2024. This growth caps off a tumultuous year for the NFT market, which saw a significant recovery in the fourth quarter.
Data from CryptoSlam shows that total NFT sales for 2024 reached $8.83 billion, exceeding 2023 by over $100 million. Although a 1.1% increase may not seem substantial, it highlights the market's rebound capability after several months of declining sales.
NFT Sales in 2024 | Source: CryptoSlam
The data indicates that December's strong performance was partly due to Ethereum-based collections such as Pudgy Penguins, Azuki, and Bored Ape Yacht Club. According to NFT Price Floor data, Ethereum NFTs accounted for $488.4 million of total sales in December. Pudgy Penguins stood out with a trading volume exceeding $285 million, while other collections like Lil Pudgys and Azuki added another $222 million.
In comments to crypto.news, NFT Price Floor co-founder Nicolás Lallement stated that the NFT market was "strong for Ordinals (Bitcoin) and Solana NFT collections in the first quarter of 2024," further adding that "the repricing of Ethereum collections was long overdue."
As a trigger for this repricing, we see the current trend of 'binding tokens to NFTs.' Projects like Pudgy Penguins, Doodles, and Azuki have either launched or announced meme/L2 governance token plans, greatly sparking market interest and repricing blue-chip NFTs.
— Nicolás Lallement
Lallement pointed out that this repricing "is not just coming from airdrops," as many NFT holders "have shifted profits gained from speculative memecoin trading to long-term value investments, preferring quality collections." He noted that this trend is particularly evident on Ethereum, which has the most mature blue-chip collections.
Looking ahead to 2025, I expect this effect to gradually transmit throughout the NFT ecosystem. It will likely start with collections linked to airdrops, then spread to blue-chip PFP collections on Ethereum, generative art (like Art Blocks), and eventually cover Solana and Bitcoin.
— Nicolás Lallement
The NFT market saw a genuine rebound in the fourth quarter. After a tough third quarter with only $1.12 billion, the fourth quarter soared by 96%, reaching $2.2 billion. November's $562 million in sales laid the groundwork for December's nearly $1 billion performance.
Industry experts attribute this round of rebound to the growing confidence in the cryptocurrency market. For instance, DappRadar researchers noted that rising token prices may have sparked optimism, attracting new buyers. DappRadar blockchain analyst Sara Gherghelas believes this differentiation "may be attributed to renewed trading activity in quality collections (like those from Yuga Labs) and rising token prices."
The improvement in liquidity and participation for blue-chip collections is continuously strengthening collectors' and investors' confidence, as they now view NFTs not only as speculative assets but also as cultural commodities.
— Sara Gherghelas wrote in a report
Still Far from the Peak
Despite a strong year-end performance, total NFT sales for 2024 remain far below the market's peak levels. In 2021, NFT sales reached $15.7 billion, nearly double this year's figures. The following year, it soared to $23.7 billion.
Lallement believes that NFTs have a "unique positioning" as both high-risk speculative assets and status symbols. He explains that in the late stages of a bull market, participants with increased asset returns often shift their focus from speculative investments to status assets like digital art and collectibles.
This behavior stems from the desire to flaunt wealth and gain recognition within circles. To bring NFTs back to the high levels of 2021-2022, we will likely need Bitcoin to reach a significant price point (like $150,000) and Ethereum to set new historical highs (potentially several times higher, around $10,000).
— Nicolás Lallement
Once these milestones are achieved, Lallement anticipates a "capital rotation from fungible tokens to certain NFT assets." He believes that when market participants begin to shift profits to high-value collections, it could again drive valuation inflation. "Strong token performance can revive investor confidence, create a wealth effect, and reignite interest in NFTs as both investments and status symbols," he concluded, adding that this dynamic may continue, causing the NFT market to still experience cycles of boom and bust alongside broader cryptocurrency trends.
NFT Activity in Q4 2024 | Source: Tiexo
According to statistics from NFT data analysis platform Tiexo, Blur and OpenSea were the two leading markets in the fourth quarter, accounting for nearly 70% of total NFT sales. Blur led with $885 million in quarterly sales, while OpenSea followed closely with $607 million. Magic Eden, focused on Solana NFTs, recorded $365 million in sales.
The diversification of market activity indicates that the NFT ecosystem is still maturing, with no single platform or blockchain dominating completely. While Ethereum still leads in historical cumulative NFT sales, Solana and Bitcoin's shares are gradually increasing.
December's surge leaves us curious about how NFTs will develop next. Will the upward trend continue into 2025, or will it cool down? We may soon find out, as analysts predict that Bitcoin's rise may peak around mid-2025, which could also impact the NFT market.
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