NFT Sector Sees Mixed Fortunes, Will Independent Trends Become a Thing of the Past?

Recently, NFT market conditions have cooled with weak performance, yet competition among NFT platforms has reached white-hot intensity. What does this mean? Combined with the continued downturn across the broader cryptocurrency market since November, are NFTs also heading into a bear market?

1. NFT Market Cools, Performance Weakens

Recent NFT market conditions have cooled overall, showing declines in both volume and price. Trading volume is sluggish, with OpenSea (Ethereum) daily trading volume hovering around $100 million over the past week. On February 18, trading volume stood at $99,149,949, down nearly 60% compared to February 1 data. Major blue-chip NFTs ranking near the top, such as Bored Ape and Doodles, are also declining.

During the Winter Olympics, the "star" Bing Dwen Dwen NFT surged nearly 1000x from its issue price at its peak. However, since February 11, Bing Dwen Dwen NFT trading volume and floor price have continuously declined. On February 15, network-wide transactions numbered only 3, with trading volume down 92% from February 11. The lowest transaction price also fell to $340, down 81% from the high.

Domestic NFT projects that have led the market since the start of 2022 have also frequently seen negative news recently. For example, the recently launched Ali series (ALINFT) had a technical vulnerability where users could access the corresponding metadata and image information for blind boxes through backend code logic without opening them. "Blind boxes" instantly became "open boxes," and even spelling errors appeared on the Ali official website, leaving users who had worked hard for whitelist spots feeling cheated. Combined with various scandals previously exposed by the OpenDAO team's 721Club, domestic investors felt disappointed. Floor prices of domestic projects like Cold Rabbit and Jay Chou Bear plummeted across the board, with some projects hitting record-low turnover rates.

Additionally, repeated counterfeit and fraud incidents have further shaken market confidence. Due to rampant counterfeiting, NFT marketplace Cent halted most trading on February 6. The platform was famous for hosting the auction of an NFT made from Twitter's former CEO Jack Dorsey's first tweet, which was also one of the earliest NFTs sold for over one million dollars in cryptocurrency. Now, however, it cannot withstand the pressure. Counterfeits haven't appeared only on Cent - OpenSea's January report showed that 80% of free-mint NFTs on its platform were "infringing works and scams."

Market conditions are cooling, but several NFT marketplaces are heating up. Following OpenDAO, OpenSea's challengers have emerged endlessly, with NFT trading platforms rising together.

2. NFT Platforms Rise in Competition, Reaching White-Hot Intensity

On Christmas Day last year, dissatisfied with OpenSea's delay in launching a token and with many of its actions seeming to indicate an IPO possibility, angry users established the autonomous organization OpenDAO, airdropping SOS tokens to OpenSea users. Thus began the battle for NFT platforms.

Several months later, OpenDAO's team 721Club is now deeply mired in corruption scandals, constant infighting, and development progress hasn't met expectations. LooksRare, a latecomer, has risen above by airdropping to some OpenSea users and establishing a series of economic incentive mechanisms targeting OpenSea's current weaknesses. It quickly surpassed OpenSea, continuing to dominate NFT platform trading volume.

However, LooksRare isn't as impressive as it appears. On February 7, a Twitter user questioned the purpose of LooksRare team transferring nearly $73 million and the reasonableness of returns sources. Moreover, the project team participated in staking before the airdrop opened, meaning most trading fee distributions and token rewards were divided up by whales and the project team. Setting aside the project team, LooksRare's reliance on the "trading mining" mechanism itself has also revealed drawbacks. This reward mechanism has gradually evolved into a volume-washing game. Although LooksRare's trading volume remains above OpenSea's, daily active users are only a fraction of OpenSea's, maintaining false prosperity.

Is sharing profits with the community really impossible? Other OpenSea challengers have also begun exploring. On February 2, NFT trading platform Mintable launched a "vampire attack" on OpenSea by selling NFTs at a loss. This wasn't Mintable's first move - at the end of January, Mintable sold 9 MutantApeYacht Club NFTs at prices 1-2 ETH below floor price. The platform explicitly stated plans to repeat this strategy to weaken OpenSea's market position.

Also targeting OpenSea is X2Y2. On February 16, NFT trading platform X2Y2 announced that 12% of X2Y2 tokens would be used to airdrop to OpenSea historical trading users. X2Y2 chose a different path from LooksRare, focusing on an "NFT staking mining" incentive mechanism. Simply put, "NFT staking mining" means the higher quality NFTs users list, the higher rewards they can earn. This model aims to solve the platform's supply-side (seller) shortage problem. Token rewards are calculated based on listed NFTs' contribution to the platform, stimulating buyers to purchase based on NFT price popularity and advantages, while reducing speculators' volume-washing behavior. This seems fairer to ordinary users, but whether it will work still requires time to test.

In addition, mainstream public chains have successively launched NFT trading platforms, such as Magic Eden (Solana), Treasureland (BSC), Paint Swap (Fantom), etc. Decentralized trading protocol 0x also proposed adding NFT order functionality in a new proposal. The new feature supports users posting on-chain/off-chain NFT orders, reduces trading costs by 54%, and supports instant royalties. Once implemented, users will be able to trade ERC-721 or ERC-1155 assets on all 0x-supported networks.

There are also indications that the New York Stock Exchange may build an NFT marketplace. According to documents, the NYSE is registering the "NYSE" trademark for use in several different blockchain and cryptocurrency goods and services, including "virtual reality and augmented reality software, NFTs, and online marketplaces." The NYSE minted six commemorative NFTs last year to celebrate major listings, and its latest move seems to indicate new progress in combining stock markets and NFTs.

NFT platforms are rising in numbers, and their diversity is gradually increasing. In this context, NFT market aggregator platforms have also received attention. These platforms not only aggregate originally scattered NFT liquidity but also allow users to purchase multiple NFTs in a single transaction, especially able to reduce user trading costs and meet whale bulk purchase needs. For example, NFT marketplace aggregator Genie Swap not only allows browsing NFT collections by trading popularity like on OpenSea, collecting favorite NFTs and viewing specific related data, but also offers better experience than OpenSea, such as 30-40% cheaper gas fees, shopping cart experience, one-click viewing of NFT investment portfolios, payment using all held ERC-20 tokens, and viewing data analysis. There's also similar project Genie, focusing on NFT bulk selling and buying functionality, with price differences made up in ETH.

3. What Does Recent Market Volatility Mean?

As mentioned above, NFT market conditions have cooled with weak performance, yet competition among NFT platforms has reached white-hot intensity. What does this mean? Combined with the continued downturn across the broader cryptocurrency market since November, are NFTs also heading into a bear market?

Over the past two months, the NFT sector has flourished, with various data repeatedly hitting new highs, unaffected by the overall market decline. Some investors even viewed the decline in assets like ETH as an opportunity to enter NFTs. Typically, when Bitcoin and Ethereum prices plunge, everything in the cryptocurrency market gets affected, but the situation has changed. Dapp Radar previously analyzed macro indicators like Bitcoin's Fear and Greed Index throughout 2021, along with NFT UAW and trading-related data, finding that NFTs are relatively independent from crypto assets and mainly influenced by their own macro trends (utility, maturity, use cases, etc.).

Noelle Acheson, Head of Market Analysis at Genesis, also stated that compared to other cryptocurrencies, NFTs "shifted to a different investment theme. NFT investors seek more than just price appreciation. Their lack of tangible valuation parameters makes investing more emotional, which won't rise and fall with risk sentiment."

However, there are still some indicators we need to watch. For example, trading volume information. Some view trading volume as more important than price. Price itself has no meaning, and floor prices without any actual trading volume are as fragile as an elephant standing on thin ice, easily collapsing. Trading volume stability is crucial for projects; otherwise, when new sellers appear, project floor prices will undergo rapid price correction. If new sellers list below floor price, it will pull down floor prices without trading volume, causing other sellers to modify prices and further depress floor prices. Therefore, recent trading volume shrinkage in some projects is worth vigilance.

Additionally, as a relatively nascent market, the NFT market is significantly influenced by news. Following last year's metaverse boom and multiple social media giants launching NFT-related features in January, there don't seem to be any major positive catalysts expected in the near term or next couple of months. Also, from past experience, the NFT market sees a breakout project every month - CLONE X in December, HAPEBEAST in January, INVISIBLE FRIENDS in February. And before projects launch, the market perceives and expects their future popularity. However, March and April don't seem to have any recognized potential breakouts yet. Finally, the "grinding for whitelist" model has shown fatigue recently, and the whitelist mechanism seems due for change.

However, we also see that the value of various NFT communities is constantly being valued and discovered. Different community-driven alternatives are increasing diversity across the entire market and continuously optimizing trading platforms' economic models. The NFT market never lacks fresh blood and innovation capability. Perhaps market volatility is just a process of squeezing out bubbles. I believe the NFT market will continue creating more wealth-creation legends.

Disclaimer

This article may contain product-related content not applicable to your region. This article is intended to provide general information only and assumes no responsibility for any factual errors or omissions herein. This article represents only the author's personal views and does not represent OKX's views. This article is not intended to provide any advice, including but not limited to: (i) investment advice or investment recommendations; (ii) offers or solicitations to buy, sell or hold digital assets; or (iii) financial, accounting, legal or tax advice. Holding digital assets (including stablecoins) involves high risk, may fluctuate significantly, and may become worthless. You should carefully consider whether trading or holding digital assets is suitable for you based on your financial situation. For questions about your specific situation, please consult your legal/tax/investment professional. Information appearing in this article (including market data and statistics, if any) is for general reference only. While we have taken all reasonable precautions in preparing these data and charts, we assume no responsibility for any factual errors or omissions expressed herein. © 2025 OKX. This article may be reproduced or distributed in full, or excerpts of 100 words or less from this article may be used, provided such use is non-commercial. Any reproduction or distribution of the entire article must also prominently state: "Copyright © 2025 OKX, used with permission." Permitted excerpts must cite the article name and include attribution, such as "Article Name, [Author Name (if applicable)], © 2025 OKX". Some content may be generated or assisted by artificial intelligence (AI) tools. Derivative works or other uses of this article are not permitted.

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