The global non-fungible token ($NFTThe sector’s total market capitalization fell below $1.5 billion, returning to levels last seen before the sector’s rapid expansion in 2021.
The retracement occurred alongside a broader crypto market downturn over the past two weeks, CoinGecko data shows. On January 23, the total cryptocurrency market capitalization was around $3.1 trillion, before falling to $2.2 trillion on Friday.
Major assets such as Bitcoin (BTC) fell from around $89,000 to around $65,000, while Ether (ETH) fell from $3,000 to almost $1,800 over the same period. Bitcoin and Ethereum are the two largest networks for NFTs in terms of 30-day trading volume, according to this report $NFT data aggregator CryptoSlam.
The $NFT The decline in market capitalization follows several high-profile closures and exits, underscoring the sector’s ongoing contraction.
Total $NFT market cap chart. Source: CoinGecko
The increasing supply clashes with the decreasing demand
The market reset has been exacerbated by a growing imbalance between markets $NFT buyer’s supply and demand.
As reported by Cointelegraph on December 31, total $NFT supply continued to grow even as sales and prices fell, pushing the industry into a high-volume, low-price structure.
Data from CryptoSlam shows that the number of NFTs in circulation has risen to almost 1.3 billion in 2025, a 25% increase from 2024. Total $NFT revenue fell 37% year-over-year to $5.6 billion, while average selling prices fell below $100.
The difference suggests that although minting coins became cheaper and barriers to issuance fell, buyer participation and spending failed to keep pace.
Related: US prosecutors drop OpenSea $NFT fraud case after appeals court reversal
Company exits and platform closures create extra pressure
The decline follows a series of high-profile pullbacks that reflect the market’s decline. On January 7, footwear giant Nike quietly shed RTFKT, the digital collectibles studio it founded at the height of the $NFT tree.
The reported sale followed the company’s decision to cease operations due to an investor lawsuit.
In addition, marketplace closures have accelerated. Nifty Gateway, one of the first $NFT platforms, said it will close on February 23 and has entered recording-only mode. The Gemini-owned platform cited a prolonged market downturn as it unwinds.
Socially on January 28 $NFT platform Rodeo announced it would cease operations after failing to scale sustainably. Rodeo said it would transition to read-only mode before shutting down completely in March.
Magazine: Digital art will ‘age like fine wine’: in the 9-figure image of Flamingo DAO $NFT collection