After the NFT Crash: Is Speculation Dead, Should Tools Rise?

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Author: Sanqing, Foresight News

On January 5th, the NFT Paris Developer Conference, originally scheduled for February, suddenly announced its cancellation. Once a venue for all-night parties along the Seine, it is now only left with a cold official announcement tweet: “The market crash has dealt a huge blow to us. Even with aggressive cost-cutting measures, we still cannot sustain.”

Five years ago, digital artist Beeple’s work “Everydays: The First 5000 Days” sold at Christie’s auction house for a staggering $69.3 million. Subsequently, from CryptoPunks with multi-million dollar sales to countless digital collectibles endorsed by mainstream institutions, that was the golden age of NFTs.

From a record-breaking auction sale to a industry conference forced to cancel, NFTs have completed a full cycle from frenzy to liquidation in five years.

Image - Everydays: The First 5000 Days NFT

NFT Market Supply and Demand Imbalance

Supply Explosion. According to CryptoSlam data, the supply in 2025 increased by 35% compared to 2024’s 1 billion units. Over the past four years, the total NFT supply skyrocketed from 38 million to 1.34 billion, a growth of approximately 3,400%.

Sales Contraction. CryptoSlam data shows that the total NFT sales in 2025 were about $5.63 billion, down 37% from $8.9 billion in 2024. According to CoinGecko data, the total market cap of NFTs peaked at about $17 billion in April 2022 and fell to approximately $2.4 billion by the end of 2025, a decline of about 86%. In just 2025, the total market cap shrank from about $9.2 billion in January to its end-of-year scale, a decrease of 68% year-over-year.

Liquidity Dilution. As minting thresholds lowered, the market entered a “high-frequency, low-price” mode. CryptoSlam data shows that the average transaction price dropped from $124 in 2024 to $96 at the end of 2025. Compared to the peak of over $400 during the bubble in 2021-2022, it has fallen by three-quarters.

Image source: CryptoSlam

Even top-tier NFT projects and blue-chip NFTs are not immune. For example, CryptoPunks’ floor price has fallen to about 30 ETH, down 78% from its 125 ETH peak in 2021; Bored Apes (BAYC) dropped 83% from about 30 ETH to around 5 ETH; Azuki declined 93% from about 12 ETH to 0.8 ETH.

Platform Collective “Escape” and Evolution

The movements of industry leaders mark the end of this cycle.

Once sitting firmly at the top of the NFT market, OpenSea’s platform revenue has fallen from $50 million to $120 million per month during the NFT boom to less than one million dollars.

Therefore, OpenSea announced a transformation, shifting from a simple “NFT marketplace” to a “Trade Everything” general on-chain trading hub, covering physical collectibles and tokens, and confirmed plans to issue tokens.

Once at the peak upon debut, Blur’s TVL continued to hit new lows, and its token price also dropped 99% from its high.

Similarly, Magic Eden, launched on the Solana chain, experienced a year of operation before issuing tokens. Affected by the NFT market downturn and bearish expectations, the platform’s trading volume began to shrink, and its token price also fell over 98% from its peak.

Even projects that couldn’t keep up with the times, such as veteran NFT marketplace X2Y2, have been eliminated, completely shut down, with the team shifting focus to AI.

From “Tokens” to “Brands”

Amidst the bleak landscape, Pudgy Penguins successfully broke through the trend and became an industry anomaly. Its success was not based on complex token innovations or short-term speculation hype, but on transforming digital IP into physical consumer products, gradually building a sustainable brand ecosystem spanning Web3 and traditional retail.

Through CEO Luca Netz’s dual-income model, Pudgy Penguins deeply integrated IP licensing with physical goods. Its toys have entered over 10,000 retail channels worldwide, including Walmart, Target, and Walgreens. According to AInvest, this transformation has generated about $50 million annually, effectively offsetting the overall shrinkage of the crypto market.

Image - Pudgy Penguins toys shelf at Walmart, USA

During Christmas 2025, Pudgy Penguins invested approximately $500,000 to project giant animations onto the Sphere, a landmark in Las Vegas.

Image - Pudgy Penguins image on the Sphere

This advertising campaign, targeting millions of tourists, avoided crypto jargon and NFT terms, instead presenting family-friendly IP images. Through brand exposure, it indirectly stimulated liquidity in the secondary market. Over the past 14 days, the NFT floor price increased by 25%, and trading volume rose by about 33%.

This shift from speculation to cultural operation seems to be becoming a consensus among industry survivors. Last May, Yuga Labs, the issuer of Bored Apes (BAYC), transferred the IP rights of top NFT project CryptoPunks to the non-profit Infinite Node Foundation, aiming to detach it from volatile price speculation and pursue long-term artistic preservation and cultural operation.

Physical Endorsement and Functional Return

In addition to IP branding, NFTs are becoming foundational tools for connecting physical assets (RWA).

Physical Card Trading. The platform Courtyard.io is changing the game. They store authentic Pokémon cards in certified insured vaults and tokenize them as NFTs. Within 30 days of late 2025, the platform processed over 230,000 transactions, generating about $12.7 million in sales, demonstrating strong market demand for high-liquidity, physically-backed assets.

Functional Tickets. FIFA (Fédération Internationale de Football Association) also joined this camp, introducing “Priority Purchase” NFTs for the 2026 World Cup ticket sales. These NFTs are not for hype but serve as verification tools to prevent scalping and price fraud in the secondary market.

What Has NFT Noticed Died, and What Remains?

NFT has not “died out,” but it has indeed experienced a death once.

What died was the illusion of viewing NFTs as a financial asset that could be divorced from real value, endlessly minted and traded based solely on narratives. In the face of infinite supply and limited demand, this path was doomed to be unsustainable.

What remains is NFTs’ role as a “proof layer.” It is no longer required to generate value independently but embedded within IP brands, physical assets, and functional scenarios, serving as a foundation for rights confirmation, circulation, participation, and verification.

From Pudgy Penguins’ toys on shelves, to on-chain circulation of physical cards, to anti-scalping mechanisms for World Cup tickets, NFTs are stepping back from the speculative stage and returning to a toolbox.

For the NFT speculative market, this is undoubtedly a winter. But for NFTs themselves, it is more like a rebirth after disillusionment.