After the NFT collapse: speculation is dead, should tools be established?

Author: Sanqing, Foresight News

On January 5th, the NFT Paris Developer Conference, originally scheduled for February, suddenly announced its cancellation. Once a place for all-night parties along the Seine, now only a cold official announcement remains: “The market crash has dealt us a huge blow. 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. Since then, from CryptoPunks selling for tens of millions of dollars to countless digital collectibles endorsed by mainstream institutions, it was the golden age of NFTs.

From a record-breaking auction to a canceled industry conference, 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 total NFT sales in 2025 were about $5.63 billion, down 37% from $8.9 billion in 2024. CoinGecko data indicates that the total market cap of NFTs fell from a peak of about $17 billion in April 2022 to approximately $2.4 billion at the end of 2025, an 86% decline. In 2025 alone, the total market cap shrank from about $9.2 billion in January to its end-of-year level, a 68% decrease within the year.

Liquidity dilution. With lowered minting thresholds, the market has shifted to a “high-frequency, low-price” model. CryptoSlam data shows 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, this is a 75% reduction.

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 peak of 125 ETH in 2021; Bored Apes (BAYC) dropped 83% from around 30 ETH to about 5 ETH; Azuki declined 93% from approximately 12 ETH to 0.8 ETH.

Collective “Escape” and Evolution of Platforms

Industry leaders’ moves mark the end of this cycle.

Once dominant in the NFT market, OpenSea’s platform revenue has plummeted from $50 million to $120 million per month during the golden era to less than one million.

As a result, OpenSea announced a transformation, shifting from a simple “NFT marketplace” to a “Trade Everything” on-chain trading hub, covering physical collectibles and digital assets like tokens, and confirming plans to issue tokens.

Blur, which debuted at its peak, has seen its TVL hit new lows, and its token price has fallen 99% from its high.

Similarly, Magic Eden on Solana, after a year of operation and token issuance, saw trading volume shrink due to market downturns and short-seller expectations, with its token price dropping over 98% from its peak.

Even projects that couldn’t keep up, like veteran NFT marketplace X2Y2, have been eliminated, shut down entirely, with teams shifting focus to AI.

From “Tokens” to “Brands”

Amidst the gloom, Pudgy Penguins has successfully defied the trend, becoming an industry anomaly. Its success isn’t based on complex token innovations or short-term speculation but on transforming digital IP into physical consumer products, gradually building a sustainable brand ecosystem bridging Web3 and traditional retail.

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

Image - Pudgy Penguins toys on Walmart shelves in the US

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

Image - Pudgy Penguins on the Sphere

This advertising campaign, targeting millions of visitors, avoided crypto jargon and NFT terms, instead using family-friendly IP characters. It aimed to boost secondary market liquidity through brand exposure. Over the past 14 days, the NFT floor price increased by 25%, and trading volume rose about 33%.

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

Physical Endorsements and Functionality Return

Beyond IP branding, NFTs are becoming foundational tools connecting to real-world assets (RWA).

Physical card trading. Platforms like Courtyard.io are changing the game. They store authentic Pokémon cards in certified insured vaults and tokenize them as NFTs. Within 30 days in 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 has also joined this trend, introducing “priority purchase” NFTs for the 2026 World Cup ticket sales. These NFTs are not for speculation but serve as verification tools to prevent scalping and price fraud in the secondary market.

What Has NFT “Died,” and What Remains?

NFTs haven’t completely “died,” but they have experienced a death once.

What died was the illusion that NFTs could be detached from real value, endlessly minted and traded based solely on narratives. In a reality of infinite supply and limited demand, this path was doomed to fail.

What remains is NFTs’ role as a “proof layer.” They are no longer expected to generate value on their own but are embedded within IP brands, physical assets, and functional scenarios, serving as the foundation for rights confirmation, circulation, participation, and verification.

From Pudgy Penguins’ toys, 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 speculative NFT market, this is undoubtedly a winter. But for NFTs themselves, it’s more like a rebirth after disillusionment.