Bybit Shuts NFT Marketplace Amid 66% CryptoPunks Price Drop
2min read Bybit, a leading cryptocurrency exchange, has announced the closure of its NFT marketplace, Inscription marketplace, and IDO services. This decision, effective from April 8, 2025, is part of a broader strategic initiative to streamline its offerings and refocus on core trading services. The move comes amidst a significant slump in the Non-Fungible Token (NFT) market, characterized by diminishing demand and falling volumes. Bybit's exit follows a series of industry-wide challenges, including a $1.46 billion security breach in February, which is believed to be the largest known heist in the crypto sector.
Ask Aime: What impact will Bybit's NFT marketplace closure have on the crypto market?
Bybit’s withdrawal from the NFT market is part of a broader trend in the crypto sector as companies rethink their approach amid market volatility. With waning interest and falling asset prices, companies are redirecting attention to AI, DeFi, and other new technologies. The exit of Bybit from the NFT marketplace signals a challenging period for the industry. However, it also presents an opportunity for other players to innovate and adapt to the changing landscape. The future of NFTs remains uncertain, but the industry's resilience and adaptability will be crucial in navigating the current challenges and emerging trends.
Bybit isn’t the only one to shut down its NFT business. Other large crypto companies have withdrawn from the area in recent weeks due to sagging trading volume and market saturation. Earlier this week, X2Y2, a top NFT exchange, said that it would discontinue its activities after handling $5.6 billion in trading volume since launching. In a statement, X2Y2 referenced a 90% drop in trading volume of NFTs since its high in 2021 as a key reason for the closure. “Marketplaces live or die on network effects. We battled tooth and nail to be #1, but after three years, it’s clear it’s time to move on,” the company said. X2Y2 further mentioned that it is turning to artificial intelligence (AI) as its new focus.
In like manner, Kraken closed down its NFT marketplace on February 27 due to a resource realignment towards “new products and services.” RTFKT, meanwhile, closed shop in January, following sharp drops in the value of its NFT collections. Even giant electronics manufacturer LG is set to shut down its NFT platform, LG Art Lab, on June 17, citing that it’s “the right time to shift our focus and explore new opportunities.”
Having once been hailed as a revolutionary step in digital ownership and art, the NFT market has been unable to bounce back from the extended crypto winter. Floor prices of some of the highest-profile NFT collections have crashed. For example, CryptoPunks, one of the oldest and most popular NFT collections, currently sells at a floor price of 42.59 ETH, down almost 66% from its high in August 2021 of 125 ETH. The Bored Ape Yacht Club (BAYC) has fared even worse, with floor prices falling 90% from 153.7 ETH in May 2022 to a mere 15.35 ETH today.
Despite the current downturn, there is still optimism within the crypto industry regarding the future of NFTs. Some analysts predict that NFTs could flourish due to fiat currency debasement and the growing popularity of digital assets among younger generations. Additionally, Canary Capital filed an S-1 registration statement with the U.S. Securities and Exchange Commission (SEC) for a new NFT-focused exchange-traded fund (ETF) in late March. This ETF aims to invest directly in Pudgy Penguins NFTs and PENGU, the project’s utility token, along with other crypto assets like Ethereum (ETH) and Solana (SOL).
Bybit has instructed its users to transfer their NFTs to external wallets before the closure date to avoid potential losses. The exchange has also reaffirmed its commitment to blockchain technology advancement, promising enhanced security protocols following the February breach. This move underscores the importance of security in the crypto industry and the need for robust measures to protect digital assets.
