Oversupply and insufficient demand, NFT market sales decline by over 30%

VitaliksTwin · 2026-01-04T18:35:44+00:00

The NFT market faces challenges of increasing supply and declining sales. Although the circulating NFT count has increased from 1 billion last year to 1.34 billion, market sales have dropped from 8.95 billion to 5.63 billion, a 37% decline. The imbalance of supply and demand has led to a decrease in average transaction prices, and the liquidity crisis has affected investor participation, raising concerns about the market's future prospects.

VitaliksTwin

2026-01-04 18:35:44

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The NFT market is facing an awkward dilemma—supply is increasing while sales are shrinking. According to the latest data from CryptoSlam, although the number of NFTs in circulation surpassed 1.34 billion in 2025, representing a 25% increase from last year’s 1 billion, sales have halved from $8.95 billion last year to $5.63 billion, a decline of 37%.

These figures reflect the true predicament of the market. The average transaction price has dropped from $124 to $96, a decrease of nearly 23%. The number of newly issued NFTs is rising, but there are no corresponding buyers to absorb them, highlighting an increasingly severe imbalance between supply and demand.

In the long term, this imbalance did not happen overnight. NFT supply skyrocketed from 38 million in 2021 to 1.34 billion this year, an increase of over 3400%, with growth far exceeding the market’s absorption capacity. Despite the frantic expansion on the supply side, the market cannot digest such a massive influx of new assets, leading to a continuous decline in total sales since peaking in 2022.

The overall market capitalization further illustrates the problem. In April 2022, the NFT market cap reached a historic high of approximately $17 billion. Now, it has fallen to around $2.4 billion, a decrease of over 85%. This is not simply a result of falling prices; it also conceals a liquidity crisis—rising transaction difficulty and a clear cooling of investor participation.

When supply expands infinitely while purchasing power continues to shrink, where is the future of the NFT market? This is perhaps a question all market participants need to consider.

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