This year’s NFT.NYC was different. Since its launch in 2019, NFT enthusiasts and industry players have come together here to learn more about the latest trends and innovations in the space. The event is all about celebrating the impacts and potential of NFTs with a clear mission to drive mainstream adoption. As such, the level of excitement and investment around the event can be seen as a barometer for the state of the NFT landscape—and this year’s event was quiet.

Far less capital was spent on activations and booths, and the show floor felt muted—even more so than the 2023 event, which itself was markedly quieter than 2022. There were still some interesting projects there, but the energy was lacking and it felt very different to the excitement and conversations I’ve had at recent events like Token2049 Dubai and GDC.

Are NFTs dead?

Back in 2021, NFT.NYC was a remarkable spectacle that was dubbed the “Crypto Coachella” and “Super Bowl” of the NFT world. Steered by immense excitement and anticipation, it drew attention from all corners of the globe with its dazzling celebrity endorsements, extravagant marketing campaigns, and eye-popping multi-million dollar art sales that illuminated billboards across Times Square. The event reflected the thriving market when trading volumes surged to $17.6 billion. That said, that era was also reflective of speculation and blind following of profits that led to many users being burned by the greed of bad actors and projects that lacked substance. 

So, does this shift mean NFTs are dying? Not at all. This year’s event reflects a shift within the crypto industry for the better. NFTs have matured: no longer a speculative fad, they have been subsumed into the wider verticals of the crypto industry, negating the need for an NFT-focused event; people have moved on to discuss tokenization in gaming, finance, property, and more. NFTs no longer have to boot-strap their own infrastructure; instead, they can tap into the robust systems and scalability offered by established crypto ecosystems.

Shifting tides

What’s changed? The NFT market crashed during the crypto winter of 2022. Digital collectibles, as a use case, claimed the term ‘NFT’ and became the sole application in everyone’s mind when they think of ‘NFTs.’ Their association with “expensive digital images of monkeys” and overpriced JPEGs gave the industry a bad name. Without the aggressive speculation driving them, digital collectibles are no longer as popular; the feverish buzz around collectible NFTs has fizzled away. 

According to Statista, NFT sales volume in the art segment decreased by over 30% from April 2021 to April 2024. The downturn in October 2023 saw the NFT market experience a significant decline, causing floor prices to plummet, marking an 83% decline from its peak. 

NFT market maturation

The purpose of NFTs has shifted, and we need to reclaim the term away from collectibles and move the conversation toward practical use cases. 

One of the most exciting is the tokenization of financial and real-world assets. As of December 2023, the Total Value Locked (TVL) in tokenized RWAs exceeded $6.5 billion. The financial industry is leading the way in RWA adoption with the tokenization of financial instruments. This year, we’ve seen players such as Blackrock and Franklin Templeton flicking the switch. 

People are also excited by the prospect of asset tokenization to represent ownership assets, including real estate, art, stocks, and more. Think about the division of a real estate asset into tokens. Fractional ownership of the property is now feasible. For instance, if 1,000 tokens signify 1% ownership each, investors can engage in trading these tokens on blockchain platforms, thereby improving liquidity and streamlining ownership transfer processes. 

In gaming, NFTs have redefined digital ownership, allowing players to truly own virtual assets such as characters and weapons. These NFTs can be bought, sold, and traded in vibrant marketplaces, generating real value—particularly when ‘dynamic’ NFTs are used, allowing the gamer to upgrade their items as they are used in-game. Cross-platform compatibility adds to the appeal, enabling seamless transfers between games (though there are other challenges to be solved in this area before it goes mainstream). 

The shift from hype and speculation to integration within the wider crypto space serves as clear evidence of the maturation of NFTs. This transformation brings tremendous advantages, such as leveraging existing infrastructure, and scalability, and fostering collaboration and innovation. As NFTs continue to diversify and find new applications, their role within the crypto space will solidify. The future of NFTs is filled with promise, as their sustained growth and integration pave the way for a thriving ecosystem.