NFT market cap slides back to 2021 pre-hype levels, near $1.5B

The global non-fungible token ($NFT) sector fell below $1.5 billion in total market capitalization, returning to levels last seen before the sectors rapid expansion in 2021.

The retracement unfolded alongside a broader crypto market downturn over the past two weeks, CoinGecko data shows. On Jan. 23, total crypto market capitalization stood at about $3.1 trillion, before falling to $2.2 trillion on Friday.

Major assets like Bitcoin (BTC) slid from around $89,000 to about $65,000, while Ether (ETH) fell from $3,000 to near $1,800 throughout the same time frame. Bitcoin and Ethereum are the top two networks for NFTs in terms of 30-day trading volume, according $NFT data aggregator CryptoSlam.

The $NFT market cap drop follows several high-profile closures and exits, highlighting the sectors continued contraction.

Total $NFT market cap chart. Source: CoinGecko

Rising supply collides with falling demand

The market reset has been compounded by a growing imbalance between $NFT supply and buyer demand.

As reported by Cointelegraph on Dec. 31, total $NFT supply continued to expand even as sales and prices declined, pushing the sector into a high-volume, low-price structure.

CryptoSlam data showed that the number of NFTs in circulation rose to nearly 1.3 billion in 2025, up by 25% compared to 2024. Total $NFT sales fell 37% year-over-year to $5.6 billion, while average sale prices slipped below $100.

The divergence suggests that while minting became cheaper and barriers to issuance fell, buyer participation and spending failed to keep up.

Related: US prosecutors drop OpenSea $NFT fraud case after appeals court reversal

Corporate exits and platform closures add pressure

The drop follows a series of high-profile retreats that mirror the market's pullback. On Jan. 7, footwear giant Nike quietly offloaded RTFKT, the digital collectibles studio it acquired at the height of the $NFT boom.

The reported sale followed the companys decision to shut down operations amid an investor lawsuit.

In addition, marketplace shutdowns have accelerated. Nifty Gateway, one of the earliest $NFT platforms, said it will close on Feb. 23 and has entered withdrawal-only mode. The Gemini-owned platform cited a prolonged market downturn as it winds down.

On Jan. 28, social $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 entirely in March.