NFT Market 2025: Trends, Real-World Assets, and Future

Key Takeaways

• Market Maturity: NFT trading volume remains stable at $2.82 billion in H1 2025, with transaction numbers up 78% despite lower average prices
• Utility Focus: The market has shifted from speculation to practical applications, with RWA tokenization leading growth
• Institutional Adoption: Major companies like BlackRock, Starbucks, and Nike are integrating NFTs into business operations
• Technology Evolution: Dynamic NFTs, cross-chain compatibility, and AI integration are driving innovation
• Long-term Viability: NFTs are becoming infrastructure components rather than speculative assets

The NFT market in 2025 is shifting from spectacle to structure. As trading volumes stabilize and transaction activity climbs, NFTs are embedding themselves into real-world applications, especially through the rise of real-world asset (RWA) tokenization. From property titles and luxury goods to loyalty programs and identity credentials, NFTs are becoming tools, not trends.

This year marks a quiet transformation: institutions are building, users are diversifying, and infrastructure is catching up. What once symbolized speculation is now shaping ownership in the digital economy.

NFT Market Overview 2025

The NFT market in 2025 bears little resemblance to the exuberant heights of 2021 and 2022. Following a boom-and-bust cycle, the sector is now transitioning into a more sustainable, utility-focused era. According to Dapp Radar, NFT trading volume in H1 2025 reached $2.82 billion, reflecting only a modest 4.6 percent dip from H2 2024. While overall dollar volume has cooled, engagement is rising. Q2 2025 recorded 12.5 million NFT transactions, marking a 78% increase from the previous quarter.

This contrast between falling dollar values and surging transaction counts points to a healthier, more inclusive market. NFTs are no longer dominated by speculative investors chasing headlines; they are attracting a broader base of users who seek utility, ownership, and access.

This shift is viewed positively by industry experts as a healthy signal. Aubrey Terrazas, Vice President of Marketing at NFT platform Rarible, notes that the market is gradually “moving beyond the purely speculative phase toward projects with real utility and community-driven initiatives,” with NFT prices stabilizing while “interest and innovation remain strong.”

Declining prices do not signal collapse. Rather, they reflect a market maturing beyond hype. NFTs are evolving into tools for digital identity, community access, and ownership verification. As Aubrey Terrazas, VP of Marketing at Rarible, notes, the market is moving past price-driven speculation toward applications that deliver lasting value.

After the NFT bubble burst, the market in 2025 has taken on a new shape: calmer, more grounded, and increasingly discerning. The days of million-dollar JPEGs and headline-dominating PFP collections have faded into memory. By mid-2025, as Yahoo Finance reported, the frenzy had all but disappeared. Floor prices collapsed, trading volumes shrank, and what remains is a far cry from the hype-driven spectacle of the early boom.

The data tells the story clearly. In the first quarter of 2025, sales of top-tier collections like CryptoPunks and Bored Ape Yacht Club dropped between 47 and 61 percent compared to the same period last year. As speculative money pulled out, the market underwent a harsh correction. Most NFT projects launched during 2021 and 2022 failed to deliver long-term value. Fewer than 0.2 percent managed to generate profits for collectors. For the vast majority, losses were the norm.

Still, the collapse wasn’t the end. It marked a turning point where NFTs began to shift direction. Instead of fading away, they adapted. The crash cleared out the noise and opened space for more grounded, practical applications to take shape. As Exolix points out, NFTs today are no longer just about digital art or collectibles. They are becoming tools for verifying identity, granting access, and enabling ownership in decentralized environments.

The noise is gone, but something stronger is taking shape. In 2025, NFTs are no longer chasing hype. They’re quietly laying the groundwork for the next evolution of the internet.

Core Use Cases Driving NFT Utility in 2025

The prominent trends in 2025 show NFTs are being repositioned from speculative items to applications providing practical value to users and communities. According to a summary from Exolix, 2025 witnesses NFTs being strongly applied in the following main areas:

Gaming and Digital Game Assets: NFTs have become foundational in blockchain gaming, functioning as in-game assets such as characters, items, or virtual land that players truly own and can trade freely. Projects like Illuvium, Star Atlas, and Shrapnel have developed expansive virtual worlds with NFT-driven economies where ownership carries real value. In Shrapnel, for example, players can mint and trade weapon skins and map elements, with all transactions secured on-chain. 

According to Messari’s 2025 mid-year report, over 35% of active wallets interacting with NFTs were tied to gaming-related dApps, signaling that NFTs in games are more than a passing trend, they are infrastructure.

Digital Identity: Decentralized identity (DID) systems increasingly use NFTs to represent verifiable credentials and access rights. These NFT credentials act like digital passports, stored in a user’s wallet and used to log into services without the need for traditional usernames and passwords. 

For instance, Gitcoin Passport and Polygon ID offer systems where NFTs validate voting eligibility, certifications, or exclusive community access. This model not only enhances privacy and security but also gives individuals ownership over their identity data.

Event Ticketing: NFTs are gaining traction as a secure, flexible alternative to traditional digital tickets. Unlike QR codes or PDFs, NFT tickets are harder to counterfeit, can be freely transferred on secondary markets, and allow organizers to earn royalties from resales. Some platforms also embed smart features.

For example, GUTS Tickets enables NFT tickets that update in real time to reflect schedule changes or seat upgrades. In early 2025, major events like Coachella and several UEFA matches tested NFT ticketing with positive feedback regarding fraud reduction and smoother entry logistics.

Digital Art and Collectibles: While trading volume has dropped dramatically since 2021, the NFT art market remains active in curated and niche spaces. Platforms such as Foundation, Zora, and SuperRare continue to support a community of serious digital artists and collectors. Rather than chasing hype, participants today tend to be more informed and focused on artistic or technological innovation. 

According to Zora’s 2025 Q2 data, the platform sees fewer but higher-quality mints, with over 65% of sales now coming from returning collectors. It’s a sign of long-term engagement rather than speculative flipping.

Real-World Asset Tokenization (RWA):This is one of the fastest-growing sectors for NFTs in 2025. By linking NFTs to physical assets, platforms can create verifiable proof of ownership and streamline trading of high-value goods. Courtyard is a standout example:  it stores rare Pokémon cards in secure facilities and issues corresponding NFTs, enabling collectors to buy and sell without handling physical inventory. 

Other platforms like 4K, Mattereum, and Overnight are working on tokenizing luxury watches, wine, art, and even real estate titles. According to Galaxy Research, the RWA tokenization market surpassed $6 billion in total asset value by mid-2025, with NFTs playing a key role in fractionalizing ownership and improving asset liquidity.

Membership and Loyalty Cards: Major consumer brands are increasingly adopting NFTs in their loyalty and membership programs to drive engagement and personalize rewards. Starbucks Odyssey, launched on the Polygon network, allows users to complete interactive experiences and earn NFT stamps that unlock perks such as free drinks, limited merchandise, or invites to exclusive events such as Nike’s .

Swoosh platform offers NFT-based virtual sneakers that grant early access to product drops and community events. According to Deloitte’s 2025 retail innovation report, over 150 global brands have either piloted or implemented NFT-based loyalty systems, especially in fashion, travel, and food service industries.

This shift reflects a clear evolution in the role of NFTs by 2025. The focus has moved away from hype and toward real-world utility and meaningful user experiences. Most new projects are built around delivering concrete value to holders, such as access rights, services, or revenue participation, rather than simply selling images in hopes of future price appreciation.

Established PFP collections that once relied on speculative momentum have also had to adapt. To remain relevant, they are repositioning as lifestyle and entertainment brands. This involves developing products and services based on their intellectual property, fostering loyal communities, and building sustainable revenue models that go beyond initial NFT sales. A strong example is Doodles, which has expanded into entertainment and consumer goods. Its collaboration with McDonald’s and other brand initiatives helped boost quarterly sales from $22.6 million in Q1 2024 to $32 million in Q1 2025, even as the broader NFT market continued to contract.

The Pudgy Penguins collection offers another strong example. After facing a sharp drop in value during 2022 and 2023, the team shifted focus to brand-building. They developed the penguin characters into toys, comics, and retail products through various partnerships. This approach helped lift sales in the first quarter of 2025 by 13 percent year-over-year, reaching around 72 million dollars. It stands out as one of the few PFP collections that managed to grow in the midst of an otherwise stagnant market.

These cases suggest that projects built on long-term vision and strong community engagement are still able to attract capital, even as speculative interest fades. Overall, the NFT landscape in 2025 has become more stable and grounded. Trading volumes may no longer reach the euphoric peaks of earlier years, but they remain significant. In January 2025 alone, NFT sales recorded 679 million dollars, proving that while the hype has faded, meaningful activity continues.

Infrastructure and Technology: Quiet but Crucial Progress

Infrastructure is steadily improving as new blockchains, Layer-2 solutions, and standards like ERC-6551 reduce costs and expand functionality. Cross-chain bridges now allow NFTs to move freely between networks.

These developments mark a shift from speculative hype to long-term foundation building. Analysts view 2025 as a turning point, where NFTs evolve from a niche trend into a core layer of digital infrastructure. As Owen Skelton of NFT News Today puts it, NFTs are poised to move beyond volatility and find meaningful applications across industries:  reshaping how we own, transfer, and interact with assets in the digital world..

All this shows the NFT market is quietly reviving, transitioning from “bubble blowing” to building foundations for the future. Analysts believe 2025 could be an important milestone when NFTs transform from a niche hobby to a common part of digital infrastructure. NFTs will gradually become the “building blocks” foundation of both the digital world and physical industries.

As NFT News Today author Owen Skelton illustrates: we are standing “on the brink of a new era – where NFTs can finally shed their volatile speculative days to move toward broader and more meaningful roles across various industries.” In other words, after the consolidation phase, NFTs still have enormous long-term potential in the digital economy, with their core role being to shape how humans own, exchange, and manage assets in the digital world.

Real-World Applications of NFTs in 2025: Real-World Asset Tokenization (RWA)

One of the most important developments in the 2025 NFT market is the growing adoption of NFTs to represent ownership of real-world assets. Known as real-world asset tokenization, this shift reflects a move beyond purely digital collectibles. NFTs are increasingly being used as digital certificates for valuable physical items. This opens up the possibility of fractional ownership and global, around-the-clock trading of assets that have traditionally been illiquid. It also addresses long-standing inefficiencies such as slow processing, high transaction costs, and dependence on intermediaries.

By embedding ownership rights directly into smart contracts, a multi-million-dollar asset can be divided into smaller shares. These shares can be purchased by individual investors and exchanged quickly and securely, without paperwork or bureaucratic delays.

Real Estate: A Pioneering Use Case

Real estate remains one of the most promising sectors for NFT adoption. Traditionally, property transactions are slow, expensive, and burdened by paperwork. Today, NFT-based solutions are streamlining this process by allowing fractional ownership, on-chain settlement, and decentralized finance integrations.

For example, RealT offers tokenized shares of rental properties. Investors can purchase these tokens to receive rental income and freely trade them on secondary markets. Because the tokens are interoperable with DeFi protocols like Aave, they can also be used as collateral, turning physical property into a yield-generating digital asset.

Meanwhile, Propy enables property title deeds to become NFTs, allowing ownership to change hands in minutes rather than weeks. A notable transaction in October 2022 by Roofstock on-chain demonstrated this ability by selling a South Carolina home for 175,000 dollars entirely on OpenSea. The buyer paid in USDC, and ownership was transferred automatically via smart contract. The process was completed within minutes, with costs of around 10 dollars instead of thousands in fees.

Following this trend, Landshare on BNB Chain now offers fractional rental property investments with monthly payouts and staking incentives, all facilitated through token ownership. Jurisdictions such as Dubai and Singapore have supported this model by introducing legal sandboxes and clear regulations, allowing innovation to develop within compliant frameworks.

Luxury Goods and Collectibles: Verified, Tradeable, and Secure

If real estate proves the power of NFTs to modernize traditional finance, luxury goods show how they can bring clarity and trust to markets where authenticity is everything. BlockBar works with brands like Hennessy and Glenfiddich to issue NFTs linked to bottles stored in secure vaults. Owners can redeem or trade them and enjoy perks such as exclusive releases or tasting events.

Vinesia enhances this model by tagging each bottle with NFC and BLE sensors, allowing real-time monitoring of temperature and humidity. The NFT not only proves ownership but also confirms that storage conditions are being met.

Collectibles follow a similar model. Courtyard partners with PSA and Brink’s to verify and store rare Pokémon and sports cards, issuing NFTs that are tradeable without handling the physical asset. Broader platforms like 4K and Tangible authenticate luxury items, store them securely, and issue NFTs that users can trade or use in decentralized finance. If someone wants to reclaim the physical asset, they can simply burn the NFT. Tangible reported tokenizing tens of millions of dollars worth of physical goods by mid-2025, confirming rising demand.

Iconic Assets: Making the Exclusive Accessible

NFTs are also enabling shared ownership of iconic assets. In 2022, Particle acquired Banksy’s “Love is in the Air” and divided it into 10,000 NFTs. Each token represents a fraction of the artwork, giving holders both economic and symbolic participation in one of contemporary art’s most recognized pieces.

A similar model is now being applied to luxury vehicles. Several platforms allow investors to purchase fractional shares of collectible cars such as Ferraris and Lamborghinis. These digital shares offer exposure to a new category of alternative investments that previously required large capital and complex logistics.

Finance Quietly Embraces NFTs

The most significant shift may be occurring in the financial sector. While many tokenized instruments use fungible standards like ERC-20, NFTs are now being used to represent individualized financial contracts, including fund participations, structured loans, and mortgages.

BlackRock launched the BUIDL fund in 2024, offering a tokenized money market fund on Ethereum that pays daily USDC yield and remains fully compliant with U.S. securities regulations. Franklin Templeton migrated its U.S. Government Bond Fund onto Stellar and later Polygon, marking a major step in bridging traditional assets with blockchain rails. JPMorgan is also experimenting with NFT-based representations of fund shares, which can be used as collateral in institutional liquidity operations.

These developments indicate that financial institutions are not merely observing NFT evolution but actively building within the ecosystem.

A Market Built on Infrastructure, Not Hype

While media headlines have moved on from NFTs, the numbers show the market is steadily maturing. In January 2025 alone, global NFT sales reached 679 million dollars, and tokenized real-world assets surpassed 18 billion dollars in value by mid-year, rising from 10 billion dollars at the start of 2025. Broader estimates suggest the full tokenized asset market, including stablecoins and on-chain financial instruments, exceeds 230 billion dollars.

Meanwhile, the global NFT sector is projected to reach 48.7 billion dollars in 2025 and may grow to more than 700 billion dollars by 2034, driven largely by real-world utility, not digital collectibles. Blue-chip PFP collections have cooled, CryptoPunks and Bored Ape Yacht Club saw Q1 2025 sales drop 47 to 61 percent year-over-year, but some projects have adapted and grown.

For example, Doodles expanded into entertainment and merchandise, collaborating with McDonald’s and increasing quarterly sales from 22.6 million dollars in Q1 2024 to 32 million dollars in Q1 2025. Pudgy Penguins followed a similar path, launching toys and comics that contributed to a 13 percent year-over-year sales increase, reaching 72 million dollars in Q1 2025.

This quiet shift reflects a deeper change in mindset. NFTs are no longer used to chase short-term gains. They are being used to address structural problems, offering liquidity where there was friction, verification where there was uncertainty, and access where there were walls.

Larry Fink, CEO of BlackRock, has described the tokenization of financial assets as an inevitable development in global markets. In line with this outlook, BlackRock launched the USD Institutional Digital Liquidity (BUIDL) fund, a money market fund deployed on the Ethereum blockchain.

Similarly, Franklin Templeton – a long-established fund management corporation – moved their US Government Bond OnChain Fund onto the Stellar blockchain and later Polygon, making it one of the first and largest tokenized funds globally. Major banks like JPMorgan also experiment with using NFT tokens representing fund shares as collateral in derivative transactions between financial institutions.

Clearly, institutional capital is still quietly flowing into the NFT sector in RWA form, focusing on infrastructure and products with real value rather than pure art collections. This shows growing confidence from traditional finance that asset digitization (including NFTs) will enhance market efficiency, liquidity, and transparency in the long term.

Investor and Developer Perspectives in 2025

Investor Perspective: More Cautious and Selective

After the NFT “bubble burst” cycle of 2022-2023, current investors have become more cautious and pragmatic. Instead of chasing trends buying digital images expecting to surf super profits, the 2025 investment community directs attention toward applications providing long-term value.

According to a comprehensive report, the NFT investment market has shifted from speculative trading to focusing on useful applications, with total sales reaching about $8.8 billion in 2024 and institutional capital increasingly flowing into infrastructure and enterprise applications rather than pure collectible collections.

In other words, major funds still care about NFTs but they’re betting on technology platforms and practical use cases, rather than pouring money into risky profile pictures or digital art. Bill Qian, Chairman of Animoca fund, once compared the new-phase NFT market to “building highways rather than racing cars,” implying investors are quietly building infrastructure and waiting for the future, rather than seeking short-term explosions.

Venture firms remain active but far more selective. Firms such as Andreessen Horowitz, Binance Labs, Galaxy Digital, Pantera Capital, Coinbase Ventures, and Animoca Brands are investing primarily in projects that demonstrate user adoption, technological credibility, and revenue potential. Average funding rounds declined from about $25 million in early 2024 to $18 million by year-end, with deals emphasizing milestone-based equity-token structures and investor safeguards.

Binance Labs – Binance exchange’s investment arm – also emerged as an active investor in 2024, focusing on funding multiple rounds for NFT gaming projects and Web3 infrastructure companies. Their portfolio performed particularly well in blockchain gaming and NFT infrastructure. Veteran crypto funds like Galaxy Digital and Pantera Capital also maintain NFT investment activities, mainly targeting protocols, scaling solutions, DeFi projects combining NFTs, and Web3 platforms with long-term potential.

Besides that, notable industry names like Animoca Brands – famous for their game/metaverse portfolio – continue backing many NFT gaming projects; or Coinbase Ventures actively supporting NFT project founders with operational experience and networks in infrastructure, finance, and NFT trading platforms.

Clearly, capital flows from specialized funds are still quietly flowing into the NFT ecosystem, though not as ostentatious as in 2021. However, the difference is investors are now very selective. They demand NFT projects have clear business models, solid technology, and real communities before investing.

Statistics show average NFT startup funding round values decreased from ~$25 million in early 2024 to about $18 million by end of 2024 – reflecting that investors have become more demanding and only accept reasonable valuations, no longer blindly FOMO investing. Instead of racing to “burn money” for market share, new NFT deals often include investor protection clauses, milestone-based disbursement, and prioritize SAFE+Token investment structures to hold both company equity and future project token allocations.

Expensive lessons from 2022-2023 (numerous project collapses, PFP floor prices crashing) made both individual and institutional investors realize that only projects with practical utility and sustainable user bases survive. Unsurprisingly, the 2025 market witnesses consolidation: most small NFT projects disappear, while capital and users concentrate on a few large, reputable platforms or “blue-chip” collections that have proven their value.

After the shakeout, only about 0.2% of previously issued NFT collections are considered successfully profitable, but these surviving projects (usually those focusing on utility and community) create investor confidence that NFTs still have a future if done right.

A positive signal is traditional institutional investors gradually participating in NFTs through RWA tokenization as analyzed above. Wall Street names like BlackRock, JPMorgan, Goldman Sachs… all have initiatives related to blockchain and NFTs (in the form of digital certificates for assets). When these projects achieve positive results – like BlackRock raising hundreds of millions USD through the BUIDL fund tokenizing T-bills – traditional investment funds will become more bold in experimenting with NFTs.

Overall, major capital hasn’t abandoned NFTs but is “changing channels” toward safer and more practical directions. Instead of rushing to buy digital artworks, they’re investing in building exchanges, storage wallets, NFT lending protocols, or projects applying NFTs to finance, gaming, and consumption.

NFTs in 2025 investors’ eyes are no longer lottery tickets of chance, but a component in long-term portfolios: if NFT projects have models generating cash flows, loyal communities, and clear products, they’re still willing to bet.

Developer Perspective: Persistent Exploration of Potential

Parallel to investor sobriety, the Web3 developer community continues diligently building the NFT ecosystem despite market volatility. It can be said that these “builders” are the force keeping the NFT flame from dying after the bubble storm. While the public has become somewhat indifferent and thinks “NFTs are dead,” developers continue quietly developing – and NFT applications are still growing silently under the “radar.”

They see in NFTs important technological pieces for the Web3 future, helping solve problems of authentication, ownership, and digital interaction that the Web2 model couldn’t achieve. Therefore, despite temporary declining interest, the development team still considers NFTs as the foundation for creating new applications.

In 2025, developers focus on upgrading NFT experience and infrastructure to prepare for the next wave of users. In fact, a major barrier preventing public adoption of NFTs is the still-complex user experience (needing to know crypto wallets, paying high gas fees, confusing interfaces). To overcome this, the builder community has created many new tools and technical standards.

For example, Ethereum introduced the ERC-6551 standard allowing each NFT to open an accompanying “wallet account,” enabling NFTs to hold other assets themselves – opening possibilities for creating dynamic NFTs (e.g., game character NFTs owning other NFT items inside).

Many projects focus on building cross-chain solutions so users can seamlessly transfer NFTs between Ethereum, Solana, Polygon… without needing complex technical understanding. Additionally, new platforms and protocols emerge to improve interfaces and reduce friction for mainstream users.

For instance, increasingly more no-code NFT creation tools, Web3 wallets integrated into mobile applications, help users mint or manage NFTs as easily as sending emails. Thanks to these efforts, technical barriers are gradually lowering, promising to bring NFTs closer to the masses naturally.

Regarding product direction, builders have also shifted focus from far-fetched ideas to practical needs. If 2021 witnessed thousands of NFT projects born with just “mint – hype – dump” unsustainable models, then 2025’s surviving projects all put utility first. Developers understand they must create products/services that users truly want to use, not rely forever on speculative greed.

New NFT projects are therefore usually tied to specific application contexts – like NFT platforms for concert ticket sales, digital identity management applications for DAO communities, new generation play-to-earn games, or NFT solutions for enterprise data (certificates, documents).

In other words, NFTs are gradually becoming the hidden “back-end” behind applications, rather than flaunting upfront to create hype as before. This means users can use Web3 products (e.g., play games, receive NFT tickets, use NFTs as login ID) without even needing to understand what NFTs are at the technical level.

This “hide technology, highlight experience” approach is being pursued by builders to naturally draw Web2 users into Web3, instead of trying to attract through hype like the early phase.

Another aspect the developer community cares deeply about is the safety and sustainability of the NFT ecosystem. After the bubble phase, those remaining all hope to build a healthy market, avoiding repeating past mistakes. Therefore, projects focus more on securing smart contracts, preventing phishing fraud, and protecting intellectual property rights in NFTs.

For instance, many platforms have adopted open-source standards allowing code inspection, integrated warnings against fake wallet addresses, or deployed identity verification solutions for NFT creators to prevent selling counterfeit NFT artworks as before. Content copyright issues are also gradually being resolved through NFT licensing protocols and transparent on-chain royalty tracking.

Simultaneously, builders also focus on user education: after the chaotic period with many scams, the NFT community is now more knowledgeable – they prefer small but quality, deep interactions rather than herd movements. An analysis report notes “thanks to fewer scams and better tools, users now interact more cautiously and wisely.”

Thanks to this mature environment, developers have confidence that when the growth cycle returns, NFTs will have solid foundations for sustainable explosion.

In summary, from builders’ perspective, NFTs have never been “dead” – just quietly evolving. They’re preparing the best technology pieces, products, and user experiences, so when favorable conditions (e.g., new capital flows from markets or technological breakthroughs) appear, NFTs can return stronger but on a solid foundation.

As the development community assesses: “NFTs won’t disappear, because blockchain still needs a way to represent unique, transferable digital assets.” Builders believe NFTs are the best tool for this purpose, and their mission is to continue perfecting this tool until it truly creates large-scale value in digital life.

Prominent NFT Technology Trends in 2025

Bitcoin Ordinals (NFTs on Bitcoin)

The emergence of Ordinals, a protocol that allows data to be inscribed on individual satoshis within the Bitcoin blockchain, marked an unexpected new chapter for NFTs in early 2023. For the first time, Bitcoin, widely regarded as the world’s most secure and valuable blockchain, gained the ability to store and transfer NFTs, known as “inscriptions,” containing images, text, and other digital content.

In just the first 200 days, over 1.14 million Ordinal NFTs were minted on Bitcoin. This user growth outpaced the early adoption phases of NFTs on both Ethereum and Solana. By the end of 2023, Bitcoin had firmly established itself as one of the three most active NFT ecosystems, with total annual trading volume for Ordinals reaching approximately 725 million dollars.

The sudden popularity sparked a wave of experimentation. New collections such as Bitcoin Punks and Ordinal Penguins gained traction, drawing even veteran creators from the Ethereum NFT scene. Yet, as with previous speculative cycles, the market cooled rapidly. By the first quarter of 2025, total Bitcoin NFT sales had fallen to roughly 291 million dollars, down 79 percent from the 1.4 billion dollar peak recorded in the same quarter a year earlier.

Interestingly, while transaction volume dropped, the average value of NFTs traded on Bitcoin rose significantly, climbing to around 633 dollars compared to just 63 dollars in 2023. This trend suggests that only premium or high-conviction assets remained active. Even so, some market participants openly acknowledged that the early explosive era of Ordinals had come to an end.

Despite the downturn, the impact of Ordinals is lasting. It proved that Bitcoin, often seen as slow to evolve, could in fact support vibrant NFT activity. This helped spark a broader shift in mindset across the Web3 ecosystem, reinforcing the case for multi-chain NFT infrastructure. Developers continued building on this momentum, introducing innovations such as Recursive Inscriptions, which enable Ordinals NFTs to interact with one another’s data—paving the way for more complex and expressive forms of digital ownership on Bitcoin.

NFT Finance (NFT-Fi and Derivatives)

Following the initial boom of the NFT market, a natural evolution occurred: participants began exploring how NFTs could serve as genuine financial assets. This included using NFTs as collateral for loans, fractionalizing ownership for broader access, and even developing derivatives based on NFT price movements. Between 2023 and 2024, NFT-Fi—or NFT Finance—emerged as one of the fastest-growing sectors, with platforms such as BendDAO, NFTfi, and Arcade enabling users to borrow stablecoins or ETH against their NFT holdings.

One of the most significant developments came in mid-2023 with the launch of Blend, a peer-to-peer lending protocol created by Blur. Within months, Blend captured up to 90 percent of the NFT lending market. However, as the broader NFT market entered a downturn, NFT-Fi was not immune. From its peak in January 2024, the total value of active NFT loans collapsed by 97 percent, falling from nearly one billion dollars to just around 50 million dollars by May 2025. Participation also dropped sharply, with the number of borrowers down by 90 percent and lenders by 78 percent, compared to early 2024.

Yet, even in this period of contraction, some signals suggest a maturing market. Blend’s dominance began to fade, and a new protocol called GONDI rose to prominence, capturing over half of the lending market by mid-2025. GONDI differentiated itself by prioritizing high-quality collateral. Collections such as CryptoPunks, Autoglyphs, and works from Art Blocks like Fidenza and Chromie Squiggle made up the majority of its loan-backed assets. This marked a clear shift from earlier periods when even illiquid or obscure NFTs were commonly used as collateral.

The rise of GONDI underscores a broader trend: only NFTs with real market value and dependable liquidity are now viewed as viable financial instruments. Beyond lending, 2025 also saw renewed experiments with fractional NFTs. These allowed investors to co-own high-value NFTs by holding smaller tokenized shares, making blue-chip assets more accessible to a wider audience.

Some decentralized exchanges also introduced NFT index products, bundling multiple premium NFTs into pooled tokens that investors could buy and trade. A few platforms even began offering perpetual futures tied to major NFT collections, enabling users to speculate on price movements without owning the underlying assets. While liquidity and adoption for these tools remain modest, their existence signals growing efforts to financialize NFTs and expand the ecosystem beyond collecting and flipping.

Dynamic NFTs

While most previous NFTs had fixed data upon minting, 2025 sees a trend toward developing NFTs that can change state over time or events. These Dynamic NFTs open creative application possibilities, when a token can evolve or update based on owner interactions or external data sources.

For instance, a concert ticket collection as NFTs can update event information (show time, venue, even seat upgrades) in metadata instead of printing fixed like paper tickets. Or the Cocky NFT project issued 10,000 NFT soda cans as music event tickets: each can NFT has different colored caps indicating ticket tiers, and NFTs accumulate unique marks (badge images) after each event the owner attends, making NFTs of dedicated fans rarer and more valuable.

In art, dynamic NFTs also create new interest: artists can program artworks to change images in real-time based on external data (e.g., an NFT landscape painting could change sky colors according to current weather). Some works even allow collectors to interact and transform artworks – adding or removing artistic elements – turning ownership into a continuous co-creation experience.

Oracle technology (like Chainlink) plays important roles enabling dynamic NFTs to obtain reliable real-world data (weather, sports results, news…) and update on-chain. With dynamic NFTs, boundaries between digital assets and applications blur: each NFT isn’t just an immutable collectible, but can be “nurtured” to grow with its owner or reflect the real world within it.

Identity and Document Tokenization (ID NFTs)

Another prominent 2025 NFT direction is application as digital identity cards and personal information storage. The Soulbound Token (SBT) concept proposed by Vitalik Buterin in 2022 – non-transferable NFTs representing personal profiles and achievements – has begun realization.

Many educational and professional organizations have experimented with issuing certificates and credentials as soulbound NFTs, helping owners easily prove their qualifications online without fear of counterfeiting. For example, a university can award graduation certificates to students via NFTs stored on blockchain: students cannot sell or transfer these NFTs, but can use their wallets to authenticate degrees with employers anywhere.

Similarly, a programmer can own NFTs certifying skills (issued by platforms like Galxe or LinkedIn), and use them to log into recruitment systems without complex verification rounds. In 2025, Decentralized ID (DID) solutions achieved major progress, where NFTs are often used as means of authenticating credentials, membership, and access rights.

In other words, your NFT wallet could become a digital passport containing all necessary identity documents, membership cards, and certificates. Benefits are clear: thanks to blockchain transparency and immutability, identity or information verification becomes fast and trustworthy without invading privacy. (You only need to prove your wallet owns valid identity NFTs without revealing all personal information).

In fact, NFT-based ID can “help confirm identity across multiple different services without repeatedly sharing personal information, with clear authentication traces on blockchain, preventing fraud.” Some governments are researching issuing citizen NFT IDs: each person has an NFT containing hashed identity information, used to log into public service portals instead of scanning physical documents.

NFT identity also helps prevent fraud: for instance, a person can only receive one unique resident NFT, so cannot create second fake identities for illegitimate benefits. While still early, this direction’s potential is enormous – long-term, we could carry all documents (ID, driver’s license, insurance cards, health records…) as NFTs in wallets, and manage them safely ourselves.

Assessment and Conclusion: Long-term Potential of NFTs

We no longer view NFTs as a trend to chase but as a protocol layer for ownership and authentication in the Web3 era. If Web3 is a digital architecture in progress, then NFTs are the structural bricks—small but indispensable. The higher the structure rises, the more their value becomes apparent. This quiet resilience signals a deeper truth: NFTs are not disappearing; they are maturing. As blockchain infrastructure expands and user experiences become seamless, NFTs are poised to be the invisible engine powering trust, provenance, and value exchange across the digital economy.