As the crypto market prepares for turbulence amid the tariff wars, the NFT market seems to be in a worse position.

Trading volumes are declining and marketplaces shutting down.

The once-hyped world of non-fungible tokens, which analysts once boldly projected could balloon to over $264 billion by 2032, now seems to be limping along. Weekly trading volumes have been falling like dominoes for weeks, scaring off capital and dragging the market back to levels not seen since its explosive 2020 debut.

Blockchain analytics firm DappRadar shows that trading volumes in 2021 were riding high, hitting nearly $3 billion.

Fast-forward to the first quarter of 2025. That figure has nosedived 93% to just $23.8 million as “active traders have vanished,” blockchain analyst Sara Gherghelas noted.

“This rapid growth coincided with global shifts driven by the COVID-19 pandemic, accelerating the adoption of digital platforms and pushing artists to explore innovative methods of engaging with their audiences. However, three years later, the hype around Art NFTs has significantly decreased.”

Sara Gherghelas

The data backs her up. In 2024, trading volume dropped nearly 20% from the year prior, while total sales declined 18%. As Gherghelas put it in her 2025 research, it was “one of the worst-performing years since 2020.”

Still speculative assets

In an interview with crypto.news, OutsetPR’s legal officer Alice Frei implied that regulation is still a mess as “governments are still undecided on how to classify NFTs.”

In the U.S., they’re often treated like securities, meaning platforms must walk a legal tightrope. In the U.K., they’re seen more like collectibles under intellectual property law.

“These are examples of leading countries with clear cryptocurrency regulations; in many other countries, the situation is even more uncertain. This lack of regulatory clarity creates an environment that is ripe for fraud and erodes investor confidence. Until there is more consistency, NFT adoption will remain stagnant.”

Alice Frei

Frei also highlighted a deeper issue: beyond the worlds of cryptocurrency and gaming, NFTs are still “trying to prove that they offer real value.”

“In theory, they could revolutionize several industries — think concert tickets that prevent scalping, digital IDs for online verification, or property deeds stored on the blockchain. But in practice, most NFTs are still largely speculative assets.”

Alice Frei

Speaking of gaming, where NFTs have the most potential for mainstream use, their adoption is also struggling, Frei pointed out, recalling that Ubisoft’s Project Quartz, an attempt to integrate NFTs into AAA games, was met with “resistance from players, forcing the company to shut it down.”

Frei notes that gamers are “hesitant about digital assets that feel more like currency than a genuine addition to their experience.”

Revolving door

If the data wasn’t already bleak, March brought more bad news: a string of marketplace shutdowns added fuel to the fire. Among them, South Korean tech giant LG shut down its LG Art Lab, which was launched just three years ago at the height of the NFT mania. The company didn’t share detailed reasons, only saying that “it is the right time to shift our focus and explore new opportunities.”

Just a week later, X2Y2 — a former OpenSea rival that once boasted $5.6 billion in lifetime volume — also ceased its operations, citing a “90% shrinkage of NFT trading volume from its peak in 2021” and struggles to remain competitive in the space.

Then came Bybit. The crypto exchange, still reeling from a $1.46 billion theft linked to North Korea-affiliated hackers, quietly closed its platform.

Emily Bao, head of web3 at Bybit, said the decision would allow the company to “enhance the overall user experience while concentrating on the next generation of blockchain-powered solutions.”

Amid the wave of closures, Frei says the NFT market now “feels like a revolving door.”

“Take Bored Ape Yacht Club, for example – once the pinnacle of NFT status, its prices have dramatically dropped. At the peak, a single Bored Ape sold for $400,000, but now some are barely fetching $50,000. The problem lies in the fact that many NFT projects rely on hype rather than actual utility. If people cannot see long-term value, they are unlikely to return.”

Alice Frei

Last hope

Coinbase, too, seems to be pulling back. While it hasn’t officially shut down its NFT platform, all signs suggest it’s shifting focus. During an earnings call in early 2023, President and COO Emilie Choi indicated that the company sees “medium and long-term opportunities” in NFTs. But its real focus seems to be behind Base, its layer-2 blockchain network.

Coinbase declined to comment on its position as NFT activity continues to decline, despite multiple requests from crypto.news.

The OutsetPR legal officer thinks that with the market’s current trajectory, smaller platforms are unlikely to weather the storm. “Smaller platforms will continue to shut down, leaving only a few dominant players like OpenSea and Blur,” she said.

She explained that the shift is being driven by two major forces. First, tighter regulations are on the horizon, which will likely bring an end to the “Wild West days of NFTs.” Second, the gaming sector may offer NFTs a lifeline—but it’s still a narrow one. As Frei puts it, gaming may be NFTs’ “last hope,” though developers will still need to avoid “pay-to-win mechanics that could turn players away.”

“The hype is over. If NFTs are to survive, they will need to prove that they offer more than just expensive pictures on the blockchain,” Frei concluded.

Bybit has entered a partnership with crypto custodian Zodia Custody to segregate its custody for institutional clients.

Cryptocurrency exchange Bybit announced in a press release on Thursday a new partnership with Zodia Custody to provide institutional clients with segregated custody, along with off-venue settlement solutions.

In an April 3 press release, Bybit said that thanks to the partnership, its institutional arm, Bybit Institutional, which targets larger investors, wants to provide transparent fees and reduce the risk of exposure for its clients.

Zodia Custody, founded in 2020, offers crypto custody services and is supported by big names like Standard Chartered and SBI Holdings. The key benefit of the latest partnership, as Bybit puts it, is “Independent Custody,” where investors can trade on Bybit while keeping assets held with Zodia Custody, ensuring “full segregation and eliminating co-mingling via the Interchange solution.”

This allows institutional clients to trade on Bybit while keeping assets held with Zodia Custody, ensuring “full segregation and eliminating co-mingling via the Interchange solution,” the press release reads. Additionally, Bybit also claims that thanks to Zodia, institutitonal clients no longer need to pre-fund exchange accounts, which “minimizing exposure to exchange-side vulnerabilities and improving capital efficiency.”

In late February, North Korean hackers targeted Bybit, stealing around $1.46 billion worth of crypto in a highly sophisticated heist. The attack was reportedly carried out by compromising the computer of an employee at Safe, Bybit’s technology provider. Less than two weeks after the breach, Bybit’s CEO Ben Zhou stated that around 20% of the stolen funds had become untraceable, due to the hackers’ use of mixing services. Later on, Zhou indicated that 88% of the stolen funds from the exchange is still traceable

THORChain, a decentralized protocol enabling users to swap cryptocurrencies across various blockchains, has seen what can be described as an unwanted windfall after the Bybit hack.

The protocol processed $4.66 billion in swaps in the week ended March 2, the highest tally on record, according to data source DefiLlama. The tally exceeded the $1 billion mark on Sunday alone.

The surge in activity follows the hack of the crypto exchange Bybit on Feb. 22, which saw the North Korean malicious entity walk away with $1.4 billion in ether. Per observers, the entity used THORChain to swap and launder funds, resulting in a record activity on the platform.

“Starting from the initial Bybit Exploiter wallet, funds were sent across a further stretching net of wallets. With each ‘hop’ further from the main wallet, there was an increasing amount of intermediary wallets and the value transfers became smaller and smaller,” blockchain analytics firm Nansen said in a report shared with CoinDesk.

“From hop 2, the hacker started interacting with third-party entities to start swapping and laundering the funds. Entities with the most inflow volume from the hack include THORChain, Paraswap, Mantle, OK DEX and DODO,” Nansen added.

CoinDesk reached out to THORChain for a comment on the matter.

Per onchain analyst EmberCN, hackers have laundered the entire ETH balance in ten days, generating record revenue for THORChain.

“Hackers have laundered all 499,000 ETH ($1.39 billion) stolen from Bybit, a process that took 10 days. The ETH price has fallen by 23% in the process (from $2,780 to $2,130 today). THORChain, the main channel used by hackers to launder money, also earned $5.9 billion in transaction volume and $5.5 million in handling fees due to hackers’ money laundering,” EmberCN said on X.