NFT trading volumes plummeted for the fifth consecutive quarter, declining 80% to $823 million in Q2 2025 from $4 billion during the prior-year period, according to DappRadar data.
The sharp decline marks the weakest performance since the NFT market peaked in 2022 when annual trading volume reached over $50 billion.
Despite falling trading volumes, NFT sales actually increased 78% this quarter, indicating prices have dropped significantly while interest remains.
Profile picture NFTs experienced a significant decline, with a 72% drop in trading volume, while Real-World Assets rose to second place, posting a 29% increase in volume.
The number of monthly NFT traders increased by 20% to 668,598, suggesting that users are returning to the space with different motivations than in previous cycles.
Domain NFTs experienced growth driven by TON blockchain activity, where Telegram users purchase anonymous number-based domains linked to accounts without SIM cards.
Gaming NFTs dominated quarterly charts for the first time in years, with Guild of Guardians securing two positions in the top five collections, surpassing blue-chip projects like CryptoPunks and Bored Ape Yacht Club.
The art category saw a 51% decrease in volume but a 400% surge in sales, making Art NFTs more accessible to a wider audience.
Marketplace Consolidation Accelerates as Major Players Exit
Multiple major platforms shut down NFT operations during the downturn.
Bybit, for instance, discontinued its NFT marketplace on April 8 following a $1.46 billion security breach by North Korean hackers.
@Bybit_Official shuts down NFT and IDO platforms after a $1.5B security breach, reflecting industry trends and strategic shifts amid declining trading volumes and heightened security concerns.#Crypto #NFTshttps://t.co/QKghreYJu3
— Cryptonews.com (@cryptonews) April 1, 2025
The exchange cited efforts to “streamline offerings” while directing users to alternative platforms, including OpenSea, Blur, and Magic Eden.
Most recently, Solsniper announced the closure of its 3.5-year-old Solana NFT marketplace on June 13, automatically delisting NFTs and refunding bid balances.
The platform clarified it would continue operating as a company while shutting down all NFT-related products to focus on Telegram trading bots and memecoin tools.
Similarly, LG Electronics closed its LG Art Lab NFT platform after three years of operation, ending integration that allowed users to buy, sell, and display NFTs directly on smart TVs.
The closure follows similar exits by Kraken’s NFT marketplace and Nike’s RTFKT venture in December 2023.
VK, Russia’s largest social media platform, also shut down VK NFT Hub on April 15 amid mounting financial losses of 94.9 billion rubles ($1.1 billion) in 2024.
Additionally, X2Y2, formerly the fourth-largest NFT platform by volume, ceased operations on April 30, having recorded just $53.5 million in trading volume over the past year.
However, amidst all these, OpenSea maintained its market leadership despite sharp drops in trading volume, with sales increases linked to its upcoming $SEA token airdrop.
Users actively trade cheaper collections to farm points for future rewards, following familiar airdrop campaign patterns.
NFT Lending Market Collapses 97% as Utility Shifts Focus
Notably, the NFT lending market collapsed from nearly $1 billion monthly volume in January 2024 to just $50 million in May 2025, representing a 97% decline.
Borrowers dropped by 90%, while lender participation fell by 78% since the previous year, with average loan sizes shrinking from $22,000 in 2022 to $4,000.
GONDI overtook Blur’s Blend protocol to lead the sector with 54.2% of total outstanding volume.
Blend previously controlled over 96% of the market through airdrop incentives and aggressive flipping strategies that failed to survive the bear market conditions.
Collateral preferences shifted significantly across platforms.
On traditional platforms like NFTfi and Arcade, Pudgy Penguins dominate with over $203 million in loans since January, followed by Azuki and Bored Apes.
GONDI users focus on art NFTs and 1/1 pieces, with CryptoPunks leading at $21 million in active loans.
Loan durations tightened to an average of 31 days in May 2025, down from 40 days in 2023, indicating a more cautious and tactical approach among borrowers.
With all these declines, it is clear the sector is experiencing a fundamental shift from speculative hype to utility-driven use cases among experienced collectors and DeFi-native users.
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