Bybit Closes NFT Marketplace Amid Declining Interest and Security Concerns

By: Isha Das

Bybit, a prominent cryptocurrency exchange, has announced the closure of its NFT Marketplace, Inscription Marketplace, and Initial DEX Offering (IDO) pages, with the shutdown scheduled to take effect on April 8, 2025, at 16:00 UTC. This strategic move is part of Bybit's efforts to streamline its offerings and enhance user experience amid a general decline in NFT market activity. Users have been advised to transfer their assets from Bybit's web3 wallets before the deadline to avoid any potential issues.

Bybit's decision reflects a broader trend in the NFT market, where trading volumes and institutional interest have significantly diminished over recent years. According to blockchain analytics firm DappRadar, trading volumes for top NFT collections have plummeted by more than 95% since their peak in 2021. The number of active wallets engaged in NFT trading has also experienced a dramatic fall, decreasing from over half a million to less than 20,000 as of 2025. Furthermore, total NFT sales have dwindled to $1.5 billion in the first quarter of this year, marking a 63% year-over-year decline from the previous year's $4.1 billion.

Amid these market challenges, some NFT collections have defied the declining trend. For instance, Pudgy Penguins reported a 13% increase in sales for the first quarter, amounting to $72 million, while Doodles benefited from a partnership with McDonald's, resulting in $32 million in quarterly sales. Despite these exceptions, the overall picture for NFT markets remains subdued, with a significant reduction in both sales and user engagement compared to their earlier highs.

Adding to Bybit's challenges are security concerns following a major breach in late February where North Korea-linked hackers allegedly stole $1.4 billion in digital assets from the exchange. Much of the stolen crypto remains unrecovered, prompting Bybit to reevaluate its risk exposure and operational strategy. This pivot underscores the growing pressures faced by NFT marketplaces, not only from waning demand and decreasing trading volumes but also from escalating security risks inherent in the digital collectibles sphere. Bybit's move to streamline its operations aims to address these multifaceted issues while repositioning itself in a rapidly evolving digital landscape.