The rise and fall of NFTs – what’s left?

Non-fungible tokens burst into the mainstream as a new digital asset class in 2017, promising verifiable ownership of unique digital items on blockchain.

Early experiments like CryptoKitties hinted at the potential, but it was the 2021 NFT boom, exemplified by multi-million-dollar digital art sales and coveted profile-picture (PFP) collections, that cemented NFTs in the cultural zeitgeist.

By representing art, collectibles, and more as tokens on Ethereum, NFTs introduced the concept of digital scarcity and ownership in a way consumers could grasp.

This movement even expanded to Bitcoin in 2023 with the advent of Ordinals inscriptions, a protocol allowing individual satoshis to be “inscribed” with data. Bitcoin, generally thought inhospitable to NFTs, saw its own version of NFTs emerge via Ordinals, treating tiny fractions of BTC as unique collectibles.

Together, NFTs on Ethereum and inscriptions on Bitcoin opened a new era of on-chain culture and speculative investment, creating what many saw as a new asset class of crypto collectibles.

Yet, as with past innovations, rapid hype cycles followed. The NFT market’s story quickly became one of wild ups and downs, a mania of exuberant buying frenzies and celebrity endorsements, followed by a painful bust as reality set in. Bitcoin’s Ordinals brought their own cycle of excitement and excess.

In this report, CryptoSlate will dive deep into that boom-bust trajectory: from the euphoric peak of NFT and inscription speculation, through the subsequent collapse in activity and value, to the current search for stability and meaning in the aftermath. We’ll cover cultural moments (from viral digital art to political collectibles) and on-chain data (trading volumes, wallet stats, and more), reflecting what these cycles reveal about digital culture and financial speculation in the crypto industry.

At the height of the frenzy, NFTs became synonymous with speculative euphoria. In 2021, Ethereum-based NFTs experienced a perfect storm of hype: collections like CryptoPunks and Bored Ape Yacht Club turned into status symbols, and Twitter was ablaze with NFT profile pictures (PFPs). Celebrities, artists, and brands rushed in to launch NFTs of their own, lending the space an aura of inevitability.

During its peak, a significant chunk of the market saw blockchain art as an asset class that would only appreciate. Statements like that epitomized the exuberance of the moment, even as skeptics cautioned that the market had become detached from reality.

Speculative behaviors were on full display. Ethereum flocked to platforms like OpenSea and later Blur, flipping JPEGs for quick profit and even engaging in “Blur farming” and gaming trading volume to earn token rewards.

Once the NFT frenzy began to cool down slightly, the introduction of Ordinals in January 2023 ignited a fresh wave of excitement, this time coming from the Bitcoin market.

For the first time, Bitcoiners could mint NFTs (or “inscriptions”) directly on the Bitcoin blockchain. A frenzy of Bitcoin-based collectibles ensued, from pixelated art to text-based BRC-20 tokens (fungible meme coins created via inscriptions). By mid-2023, the Ordinals craze was so intense that Bitcoin’s NFT sales volumes briefly eclipsed those on Ethereum, with roughly $677 million in Bitcoin NFT sales in a 30-day period versus $383 million on Ethereum. This marked a stunning reversal of the norm and signaled just how far the speculative mania had spread across chains.

During this peak phase, on-chain congestion and fees told the story of demand. Ethereum regularly saw NFT drops drive up gas fees to painful highs, while Bitcoin blocks became packed with Ordinals data: at one point, surging inscription activity pushed Bitcoin transaction fees to multi-year highs.

New projects launched almost daily, from celebrity NFT collections to corporate tie-ins. The market rewarded creativity and hype in equal measure: a crude pixel art NFT might trade for millions if it had meme value or influencer backing.

In the spring of 2023, Magic Eden (a marketplace initially on Solana) expanded into Bitcoin Ordinals and rode the wave so successfully that it briefly surpassed Ethereum’s dominant marketplace, Blur, in trading volume. Magic Eden’s Bitcoin expansion, with Ordinals making up 70% of its activity, highlighted how rapidly a novel niche (Bitcoin NFTs) could command major market share.

Beneath the frenzy lay a mix of cultural and economic forces. NFTs weren’t just about money, although it can’t be denied that it was their biggest purpose. They were also about digital identity and community. Owning a Bored Ape or CryptoPunk conferred status in online communities.

Ordinals inscriptions, for some Bitcoin devotees, became a way to immortalize text or art on Bitcoin’s ledger, blending financial speculation with a bit of cypherpunk art ethos. Looking back, the peak was a manic, chaotic celebration of the possibilities of crypto collectibles. One that, in hindsight, couldn’t be sustained.

After the bubble comes the bust. By 2022 and into 2023, the NFT market’s metrics were in freefall. The exuberance dissipated, and hard data began painting a sobering picture. Trading volumes for top NFT collections collapsed by over 95% from their 2021 peak levels, according to DappRadar data.

The number of active wallets trading NFTs fell from over 500,000 at the height to under 20,000 by 2025, a mass exodus of retail participants. What had been a bustling bazaar of flippers and collectors thinned out to a relative ghost town.

The collapse in demand hit every corner of the NFT world. Once-prized “blue chip” collections saw their floor prices capitulate. A Bored Ape that might have fetched mid-six figures in 2021 could only find buyers at a fraction of that two years later.

Collections that were household names in crypto, like Bored Ape Yacht Club, “no longer command significant trading volumes,” as CryptoSlate has noted, only a handful of niche projects bucked the trend.

Overall, NFT sales volume in dollar terms plummeted: total NFT sales fell to $1.5 billion during the first quarter of 2025, down from $4.1 billion in the same period last year, a 63% year-over-year drop. Sales in March alone were down 76% compared to the previous year. This sustained downturn confirmed that the speculative fever broke, leaving behind a much smaller core of true believers and collectors.

On the Ethereum network, the retreat of NFTs was even measurable at the protocol level. At the height of mania, NFT minting and trading consumed an estimated 30–40% of Ethereum’s gas usage.

By late 2023, that figure had sunk to below 4% of Ethereum’s gas, a two-year low in NFT activity share. In other words, NFTs went from being the dominant consumer of block space during the boom to a minor footnote post-bust, as transaction activity shifted back toward other uses (or off-chain entirely). This decline in on-chain footprint was partly due to an overall market cooldown and partly due to NFT users migrating to cheaper networks and Layer-2s, but it illustrated just how stark the drop-off in engagement and liquidity had been.

All of this led to disillusionment in the community. By early 2025, sentiment had flipped from wild optimism to bearish skepticism. Raoul Pal’s comments that NFTs were “the best long-term stores of wealth” have drawn criticism that acknowledged the harsh reality: most of the community pushed back on NFT bullishness, noting how overhyped the space had been and how it was now flooded with bag holders unable to find exits.

Marketplaces that thrived on high trading volumes faced a reckoning. OpenSea, once the king of NFT platforms, saw its monthly volumes shrink dramatically from record highs. Newer platforms like Blur, after an initial surge (fueled by reward farming), also cooled off. Liquidity became so thin that even reasonably priced listings could sit unsold for days or weeks. As one analyst put it, NFTs in 2024 entered “a liquidity desert”, plenty of tokens still out there, but few buyers to be found.

Institutional and corporate participants who dipped into NFTs during the craze quietly retreated as well. Bybit, Kraken, and even LG Electronics shut down their NFT marketplaces as interest waned. These exits were part of a broader trend of waning institutional participation in digital collectibles.

By April 2025, Bybit noted the stark truth: NFT trading interest had “plummeted over 95% since the 2021 peak,” forcing it to shut down its NFT platform. The gold rush seems to be over, and what remains is an object lesson in volatility: a market that climbed a vertical wall of hype only to fall off a cliff, reminding everyone that what goes up in crypto can come down just as hard.

In parallel to Ethereum’s NFT boom and bust, Bitcoin’s own foray into collectibles via Ordinals inscriptions went through a whirlwind of its own. Launched in January 2023, the Ordinals protocol enabled something radical: every satoshi (the smallest unit of BTC) could be uniquely identified and “inscribed” with data, effectively turning it into a non-fungible digital artifact. This unlocked an entire ecosystem of Bitcoin-based NFTs virtually overnight, and the crypto community wasted no time in experimenting.

By late 2023, over 60 million inscriptions had been created on Bitcoin. These inscriptions ranged from images and profile pictures to plain text and even token data. In fact, the majority of those tens of millions of inscriptions were text-based, often used to issue BRC-20 tokens (fungible tokens riding on the Ordinals mechanism). In effect, Bitcoin’s block space became home to everything from digital art collectibles to meme coins, triggering debates about miner fees, blockchain bloat, and cultural value.

The first half of 2023 saw inscription hype skyrocket. As mentioned, Bitcoin even topped Ethereum in NFT sales volume during some periods, signaling a massive influx of activity. Bitcoin transaction fees spiked as users paid up to get their inscriptions mined into blocks. Miners, in turn, enjoyed a windfall, pocketing high fees thanks to NFT enthusiasts, a development that some argued positively affected Bitcoin’s security budget.

Ordinals mania also led to creative new experiments, often dubbed the next phase of inscriptions. One notable offshoot was “Bitcoin Runes,” an experimental fungible token protocol introduced around the time of the 2024 Bitcoin halving. So fervent was the interest in Runes that on the very day of the halving, 57.7% of all Bitcoin transactions were Rune transactions, overtaking ordinary BTC transfers.

Numbers like this show how quickly hype can shift: one week, everyone is minting pixel art Ordinals, the next, they’re crazy for Runes, the ecosystem fragmenting into hype cycles within hype cycles.

Other variants and related experiments emerged too, like Bitcoin “stamps” (another method to embed data in transactions) and various inscription indexing ideas. Each new twist brought a surge of enthusiasm, followed by a familiar fade.

The fragmentation (Ordinals, BRC-20 meme tokens, Runes, etc.) gave the Bitcoin NFT scene a somewhat chaotic, experimental feeling. It wasn’t as structured as Ethereum’s comparatively mature NFT market; instead, it was true Wild West innovation, throwing ideas at the wall to see what might stick. This raised the inevitable question: would inscriptions have long-term viability, or were they a flash in the pan?

Even within the Bitcoin community, opinions diverged. Some maximalists derided Ordinals as spam or a distraction. Others embraced them as a catalyst for Bitcoin development and culture. CryptoSlate’s analysis at the time questioned its longevity, suggesting that usage had peaked and might be in irreversible decline.

Indeed, by late 2023 and early 2024, inscription activity had cooled from its peak frenzy. The mempool congestion eased, and the pace of new inscriptions slowed from breakneck to merely brisk. Prices for the early Ordinals collections also slipped from their highs as speculators moved on.

However, the inscription experiment has left enduring impacts. For one, it reshaped Bitcoin’s cultural landscape. Bitcoin, historically conservative in use cases, now had a cohort of users interested in creativity and collectibles, not just HODLing. This opened the door to new infrastructure: wallets, marketplaces, and explorers tailored for Ordinals.

Notably, builders like OrdinalsBot attracted investment to build out the ecosystem, raising over $3 million in seed funding to develop better inscription tooling and infrastructure. That injection brought OrdinalsBot’s total funding to $4.5M and signaled confidence that Bitcoin NFTs could be more than a passing fad. And even as activity dipped from peak, Bitcoin NFTs settled into a steady presence: by April 2024, Bitcoin was still the second-largest NFT blockchain by daily sales (one 24-hour period saw $6.37M in Bitcoin NFT sales, only slightly behind Ethereum).

The inscriptions saga is a microcosm of the larger boom-bust: a burst of innovation and speculation, a comedown, and a residue of real advances that could fuel the next cycle. Whether inscriptions ultimately go extinct like the dodo or continue to linger in the space remains an open question, but their legacy is already evident in Bitcoin’s evolving narrative.

By the time the dust settled, cultural exhaustion had set in around crypto collectibles. The mainstream hype that once had everyone from athletes to pop stars minting NFTs gave way to fatigue, and in some cases, backlash. Many celebrities who eagerly jumped on the NFT bandwagon in 2021–2022 grew silent as the market soured. The public, inundated with celebrity NFT drops at the peak, became jaded by collapsing prices and constant rug pull allegations.

The result was a palpable retreat by high-profile figures and big brands. Where once a new NFT announcement by a household name was a near-daily occurrence, by 2023 such announcements had virtually disappeared. Influencer-driven projects imploded one after another, perhaps most famously exemplified by YouTuber Logan Paul’s disastrous CryptoZoo NFT game.

After raising money from fans for CryptoZoo, Paul faced accusations of a rug pull when the project failed. Under legal pressure, he ultimately offered a $2.3 million refund program to buy back CryptoZoo NFTs from disgruntled holders if they agreed to indemnify him against future lawsuits. The episode was a cautionary tale of how quickly an influencer-fueled NFT project could go south, damaging reputations and wallets alike.

This pullback extended to crypto companies and marketplaces, amounting to an institutional retreat from NFTs. Several major exchanges closed or reduced their NFT offerings as trading activity sank. By early 2024, Binance announced it was ending support for Bitcoin NFTs on its marketplace, barely half a year after adding them. Binance framed it as a move to streamline offerings, though it coincided with generally low user demand and the exchange’s own regulatory troubles.

Another large exchange, Kraken, had similarly shut down its NFT platform in 2023. Even non-crypto corporations that experimented with NFTs pulled back: LG Electronics, for instance, discontinued its “LG Art Lab” NFT platform after three years due to low traction. Many of the big players quietly exited the stage, licking their wounds from an overstated opportunity.

Regulatory headwinds also hit hard. As the U.S. Securities and Exchange Commission (SEC) ramped up crypto enforcement, it set its sights on NFTs and their marketplaces. In mid-2024, OpenSea disclosed it had received an SEC Wells Notice, indicating the SEC was investigating whether NFTs sold on OpenSea might constitute unregistered securities.

OpenSea’s CEO Devin Finzer publicly pushed back, expressing shock that the SEC would “make such a sweeping move against creators and artists” and vowing to fight the action. OpenSea went so far as to establish a $5 million legal defense fund to help NFT creators facing similar regulatory challenges. The SEC’s interest cast a shadow over the NFT space, prompting fears that new collections could be treated like token sales under securities law.

This regulatory uncertainty was another factor dampening the appetite of companies and celebrities to wade into NFTs anew. Meanwhile, multiple lawsuits cropped up around NFT projects (for example, a class-action suit against the creators of Bored Ape Yacht Club alleging misleading marketing, and other suits targeting celebrity promoters of various NFT schemes). The legal landscape turned treacherous, further accelerating the retreat of those who were only in it for the quick money or publicity.

By late 2023, the NFT and crypto-collectible scene had a distinctly survivors-only feeling to it. The casual speculators had left; the dabbling corporations had closed up shop; the fair-weather famous faces had moved on. What remained were the die-hards, the builders, and the genuinely curious, those for whom NFTs were more than just a payday.

And tellingly, even among that crowd, a more sober tone prevailed. As one early NFT whale, Vignesh “MetaKovan” Sundaresan (who paid $69M for Beeple’s NFT in 2021), observed, many of the frothiest PFP projects likely “won’t last through another crypto winter.” He predicted that the hype-driven, exclusive club NFTs would disappear and be replaced by projects with real substance and more inclusive communities.

Amid the wreckage of bursting bubbles, pockets of resilience and innovation in the crypto collectibles space began to shine through. Perhaps the most encouraging sign is that even as speculative volumes fell, NFTs did not disappear; instead, the market started to mature.

A core of enthusiasts and creators kept the flame alive, focusing on art and culture over hype. Niche art markets for one-of-one digital art and curated NFT collections still attracted collectors, albeit at smaller scales. Some formerly hyped PFP projects reinvented themselves or doubled down on community value. For example, Pudgy Penguins, a profile-picture collection launched in the 2021 heyday, managed to buck the downward trend and grow its sales by 13% in early 2025, generating $72 million in Q1 sales.

The team’s focus on brand building (including toys and social media content) helped cultivate a loyal community. Similarly, Doodles, another 2021-era collection, secured partnerships (like a collaboration with McDonald’s) that kept it in the game, earning $32 million in quarterly sales around the same time. These examples show that projects with strong brands and community engagement can weather the storm, even if their speculative price floors fell from their peak.

On the Bitcoin side, while the initial Ordinals rush cooled, a resilient subculture of Bitcoin NFT collectors emerged. They view certain inscriptions as “digital artifacts” imbued with meaning, for instance, the earliest inscription series or pieces by notable artists on Bitcoin. This has led to talk of Bitcoin’s own cultural collectibles that could accrue historical value (much like early web artifacts).

The infrastructure is evolving accordingly: Bitcoin NFT marketplaces (like Magic Eden’s BTC section and others) continue to facilitate trades, and developers are building more user-friendly wallets for managing Ordinals. The fact that venture capital is flowing into Bitcoin inscription projects, as seen with OrdinalsBot’s funding round, indicates a belief that a lasting ecosystem can be cultivated beyond the hype cycles.

Even Franklin Templeton, a major asset manager, pointed out the significance of these developments, noting that Bitcoin’s recent innovations (Ordinals, BRC-20, etc.) have broadened its ecosystem and driven new interest beyond the usual narrative of Bitcoin as just digital gold.

The populist appeal of certain NFT ventures proved unexpectedly durable. A prime example is the ongoing saga of Donald Trump’s NFT trading cards. Initially launched in late 2022 as a series of 45,000 cartoonish Trump collectibles, many in the crypto community laughed them off, but they resonated with a different audience. Trump’s NFTs attracted his political base and curious speculators, selling out multiple series.

Even as the broader NFT market slumped, the Trump digital cards maintained value and demand. As of August 2024, the combined market cap of the first three Trump NFT series was over $13 million. The first series, minted at $99 each, still had a floor price around $230 (over 2x the mint price) nearly a year later. When Trump had his infamous mug shot taken in August 2023, it sparked a trading frenzy for his NFTs: daily volume jumped by 3,700%, and the floor price of Series 1 spiked to over $300.

This demonstrated a counter-cyclical phenomenon: Trump NFTs thrived not on crypto-native speculation but on political and cultural fandom. In a sense, they became a populist case study in NFT value, driven by narrative and community more than broader market trends.

Trump took note of the demand, remarking in interviews that all three of his initial NFT collections “sold out in one day” and that his supporters were clamoring for more, leading him to plan additional series. He also admitted that accepting crypto payments (reportedly 80% of buyers paid in crypto) for his NFTs “opened [his] eyes” to the world of cryptocurrencies.

It’s telling that even as institutional players retreated, Trump doubled down, even floating ambitions for U.S. crypto leadership and hinting at future NFT endeavors as part of his political brand. Love or hate the project, Trump’s NFTs showed resilience in an otherwise dreary market, suggesting that NFTs tied to strong personal brands or movements can retain value through a bust.

Another sign of life is the continued experimentation on alternative chains and scaling solutions. While Ethereum’s mainnet NFT activity declined, creators and users increasingly explored Solana, Polygon, and Layer-2 networks to host their digital collectibles. These platforms offered far lower transaction costs and often cultivated their own communities (for example, Solana’s DeGods and OK Bears collections gained dedicated followings).

The shift to sidechains/L2s was one reason Ethereum’s NFT gas usage share dropped so steeply. The NFT community was not gone; it was partially elsewhere. Solana in particular saw NFT volume and culture persist through the bear market, with marketplaces like Magic Eden (originally Solana-only) maintaining significant user activity. Similarly, leveraging its scalability, Polygon became a hub for brands (Reddit avatars, Starbucks Odyssey NFTs, etc.) and gaming NFTs.

Even Ethereum Layer-2s like Arbitrum and Immutable host NFT gaming economies. In short, the center of gravity for innovation broadened beyond Ethereum L1, which is a healthy sign of maturation. The NFT ecosystem is becoming more multi-chain and interconnected, a bit less beholden to a single boom on one chain.

Finally, builders in the space have started focusing on adding real utility and integration to NFTs, learning from the excesses of the boom. Projects are emerging that tie NFTs to gaming, ticketing, music rights, and metaverse experiences, use cases that could drive the next growth phase on a more sustainable footing.

The boom-bust cycle of crypto collectibles offers a vivid lens through which to view the broader crypto culture. It has been at once exuberant and cautionary. On one hand, the mania demonstrated the massive appetite for digital ownership and expression. In a world increasingly lived online, people craved ways to own a piece of that experience, be it a unique artwork, a character skin, or a symbolic token of membership in a community.

NFTs provided that in a novel form, and their explosive rise spoke to a genuine cultural phenomenon: a merging of creativity, technology, and markets that unlocked new value for creators and new identities for collectors. The fact that an artist like Beeple could sell a digital collage for $69 million, or that thousands of people would spend hefty sums on cartoon ape pictures to use as an online avatar, shows a real human desire for digital self-expression and class signalling. Inscriptions on Bitcoin further expanded this by blending into the ethos of the original crypto asset, engraving culture onto the most immutable ledger.

On the other hand, the bust highlighted the age-old pitfalls of speculative excess. For a time, financial speculation eclipsed the underlying cultural innovation. The narrative became less about empowering artists or forming new communities and more about quick profits, status games, and greater-fool dynamics.

In that sense, the NFT bubble of 2021–2022 was not so different from prior manias (be it dot-com stocks in 1999, or Beanie Babies in their day): a reminder that when money rushes in, irrational exuberance and scams often follow. Many participants learned hard lessons about liquidity, security (as hacks and rug pulls were rampant), and the importance of doing one’s own research.

The market’s implosion was a cleansing event, shaking out those who were only there for a fast buck and refocusing the sector on more sustainable values. As painful as it was for those who lost fortunes or credibility, it may have been a necessary step for the industry’s maturation.