NFT Market Downturn Is a Shift, Not a Collapse, Says Rarible Co-Founder Alexander Salnikov

The non-fungible token (NFT) sector experienced explosive growth in 2021. Artists, investors, and collectors were all swept up in the frenzy. Yet, its meteoric rise was followed by a downturn, prompting questions about the sector’s sustainability.

Alexander Salnikov, co-founder of Rarible, believes the market is not facing a collapse but rather a shift. In an exclusive interview with BeInCrypto, Salnikov offered his perspective on the state of NFTs in 2025 and their role moving forward.

Are NFTs Still Relevant in 2025, or Have They Run Their Course?

The rise of NFTs, fueled by excitement and speculation, was inevitable for a market experiencing such rapid innovation. Nonetheless, like many emerging technologies, this early surge was followed by a correction. The hype gave way to the realities of market maturation and sustainability.

According to the latest report by DappRadar, the art NFT market saw an impressive surge in 2021, with trading volumes reaching $2.9 billion. However, by the first quarter of 2025, the trading volume was recorded at just $23.8 million, marking a 93% decline.

NFTs Trading Volume Over the Years. Source: DappRadar

Similarly, the number of active traders peaked at a record high of 529,101 in 2022. Yet, this figure sharply declined by 96%, with just 19,575 active traders remaining by Q1 2025.

A previous industry report from DappRadar revealed that the underwhelming performance wasn’t just a trend in 2025. In fact, 2024 was one of the worst-performing years for the NFT market since 2020. In addition, BeInCrypto also reported on a study that revealed 98% of NFT projects launched in 2024 were essentially “dead.”

Despite the decline, Rarible’s Salnikov has maintained a positive outlook for the sector. He emphasized the importance of a clear purpose when it comes to NFTs.

“Once upon a time, after the .com burst, the headlines rang that the internet was only a fad. But as more companies integrated the technology into everyday use cases, it became ingrained as a part of life,” he told BeInCrypto.

Salnikov argued that trust quickly diminishes when NFTs are viewed merely as speculative assets. In contrast, projects rooted in real community engagement or providing tangible utility offer clear value, making their worth easily understood.

Meanwhile, rather than viewing the sector’s decline as a collapse, the executive sees it as a market recalibration, with the focus shifting away from speculative hype toward projects with more sustainable value.

“The speculative phase had its moment, but now we’re watching NFTs evolve into actual infrastructure—tools creators use to build communities, products, and new digital economies,” he said.

NFTs Beyond the Hype: Unlocking Real-World Utility

Salnikov stressed that utility in the NFT space is no longer a distant concept—it is happening right now. Creators are using NFTs for membership, brands for loyalty programs, and games for player identity.

He pointed to a growing convergence between the digital and physical worlds, with NFTs being tied to merchandise, events, and even real-world assets. Binance Research’s April 2025 report further corroborates this trend.

The report spotlighted several real-world partnerships, indicating interest in NFTs. Examples include Azuki’s physical-backed NFT with Michael Lau, The Sandbox’s Jurassic World collaboration, EGGRYPTO’s anime characters with Eparida, and Sony’s Soneium platform partnering with LINE to create Web3 mini-apps.

“The next wave of growth isn’t about chasing a trend—it’s about unlocking new types of ownership and access that feel native to the internet generation,” noted Salnikov.

While this perspective offers optimism, the reality for many companies is quite different. Due to low trading volumes, major platforms like Bybit, X2Y2, and Kraken have resorted to discontinuing their NFT services.

Those that didn’t shut down explored alternative avenues. For instance, Magic Eden expanded beyond NFTs with the acquisition of Slingshot. Nevertheless, Salnikov dismissed this strategy, commenting,

“We’re not trying to bolt on non-NFT features just to stay busy—we’re building NFT commerce that actually fits the communities using it.”

He explained that this approach uses modular, customizable on-chain marketplaces. Creators can tailor them to fit their specific audiences, whether it’s a gaming project, an L3, or a legacy brand.

“NFTs are the feature—they just need the right framing,” the Rarible co-founder stated.

When Fame Fades: The Diminishing Returns of Celebrity-Backed NFTs

Going back, an interesting trend during the NFT hype era was the involvement of celebrities. High-profile figures like Justin Bieber, Madonna, and Neymar jumped on the bandwagon, attracting substantial attention to the sector. Nonetheless, their investment strategies haven’t fared particularly well.

In January 2022, Bieber spent 500 ETH (approximately $1.3 million at the time) on Bored Ape #3001. This NFT is from Yuga Labs’ Bored Ape Yacht Club (BAYC) collection.

However, according to the latest data, the NFT is worth only 13.51 WETH (around $24,174), a decline of 98.1%. Although the singer hasn’t sold his NFT, it has received little attention lately, with no promotional efforts or notable discussions around it.

Thus, while celebrities can bring attention to NFTs, this highlights the need for substance beyond the name itself. As Salnikov pointed out, celebrity involvement in the sector is fleeting.

According to him, a celebrity name alone can’t replace genuine creative direction or a strong community.

“Celebrity drops will come and go—it’s the culture behind them that determines if they stick,” he remarked.

He argued that celebrities treating NFTs as mere merchandise deters audiences. Nevertheless, when an NFT drop is intentional and truly taps into something meaningful like music, fashion, or fandom, that’s where the lasting value is found.

“We’re way more interested in working with creators who are building for the long haul than just chasing headlines,” Salnikov disclosed to BeInCrypto.

The executive also outlined the need for a more accessible and user-friendly approach for attracting interested users. He detailed that onboarding users should not feel “like a tech demo.” Salnikov pointed to Rarible as an example.

According to him, Rarible focuses on ensuring that each marketplace built on its platform is a product people genuinely want to use. This involves features such as fiat onramps, low-cost mints, a clean user interface, and, most importantly, content that resonates with users.

“We’re not selling NFTs—we’re powering experiences that just happen to be onchain,” Salnikov concluded.

While the NFT market faces ongoing challenges, it remains to be seen whether the industry is entering a new phase of growth or if further obstacles lie ahead in its evolution.