The retracement unfolded alongside a broader crypto market downturn over the past two weeks, CoinGecko data shows. On Jan. 23, total crypto market capitalization stood at about $3.1 trillion, before falling to $2.2 trillion on Friday.

Major assets like Bitcoin

The NFT market cap drop follows several high-profile closures and exits, highlighting the sector’s continued contraction.

Rising supply collides with falling demand

The market reset has been compounded by a growing imbalance between NFT supply and buyer demand.

As reported by Cointelegraph on Dec. 31, total NFT supplycontinued to expandeven as sales and prices declined, pushing the sector into a high-volume, low-price structure.

CryptoSlam data showed that the number of NFTs in circulation rose to nearly 1.3 billion in 2025, up by 25% compared to 2024. Total NFT sales fell 37% year-over-year to $5.6 billion, while average sale prices slipped below $100.

The divergence suggests that while minting became cheaper and barriers to issuance fell, buyer participation and spending failed to keep up.

Corporate exits and platform closures add pressure

The drop follows a series of high-profile retreats that mirror the market's pullback. On Jan. 7, footwear giant Nikequietly offloaded RTFKT, the digital collectibles studio it acquired at the height of the NFT boom.

The reported sale followed the company’s decision toshut down operationsamid an investor lawsuit.

In addition, marketplace shutdowns have accelerated. Nifty Gateway, one of the earliest NFT platforms, said it will close on Feb. 23 and hasentered withdrawal-only mode. The Gemini-owned platform cited a prolonged market downturn as it winds down.

On Jan. 28, social NFT platform Rodeoannounced it would cease operationsafter failing to scale sustainably. Rodeo said it would transition to read-only mode before shutting down entirely in March.