NFTs were everywhere, from pixelated punks to bored apes, they dominated headlines and drew billions in investment. But the hype has all but vanished.
In 2021, NFTs were everywhere, from pixelated punks to bored apes, they dominated headlines and drew billions in investment. By 2022, celebrities and brands were all in, buying JPEGs on the Ethereum network and even hyping metaverse real estate.
But by June 2025, the hype has all but vanished. Floor prices have collapsed, trading volumes have plunged, and the NFT market is now a shadow of its former self. So, what happened to NFTs?
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Yahoo Finance UK sat down with Nansen Research Analyst Nicolai Sondergaard, to find out whether the market is dead, what lessons were learned, and if NFTs left anything of real value behind.
NFTs, or non-fungible tokens, are unique digital assets stored on the blockchain, which signify ownership or authenticity of a specific item. They differ from cryptocurrencies like bitcoin (BTC-USD) in that they are indivisible and irreplaceable. Their uniqueness gave them value, especially in the world of digital art, music, collectibles, and gaming.
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With the NFT boom, a new digital creator economy briefly flourished. Artists tokenised their work. Musicians experimented with fan-owned tracks. Enthusiasts traded memes. What began as a niche use of blockchain technology quickly turned into a global cultural movement, but also a speculative bubble.
“Instead of being used for the potential that NFTs still have, they became memeified and, as such, were instruments for speculation,” Sondergaard said. “This is the reason why many, to this day, still do not touch NFTs, they only see and remember the people that got rich quick and the ones that got burned.”
The collapse has been dramatic. According to analysis reported by NFT Evening, around 96% of NFT collections are now considered “dead”, meaning they show no trading activity, sales, or community engagement. For context, only 30% were considered inactive back in 2023, highlighting just how steep the decline has been.
New NFT mints continue to fall month after month. As NFT Evening also reports, weekly trading volume on Ethereum-based marketplaces stands at around $90m, a fraction of the multi-billion-dollar peaks seen in 2021-2022.
So, what caused the NFT craze to fizzle out so rapidly, and what does it reveal about how investors engage with hype-fueled technologies?
According to Nicolai Sondergaard, the downfall wasn’t due to a flaw in the underlying tech, but rather how it was used. “They became memeified… traded for pure speculation. Many were fully unaware of what NFTs could be used for aside from minting a collection of pixels,” Sondergaard said.
