Kraken, a major NFT marketplace, has announced that it will shut down its NFT trading functionality in February next year. This follows the disappointing performance of NFTs over the past few years.
Customers holding NFTs with Kraken will be provided with a Kraken wallet or other self-custody arrangement. Starting this Wednesday (November 27), the market has entered withdrawal-only mode. Traders will no longer be able to list, buy, bid, or sell NFTs on Kraken.
Kraken is advising traders that they need to take their NFTs off the platform by the final closing date in February. Kraken itself has been slimming down, cutting 15% of its workforce and appointing a new co-CEO.
But Kraken is looking to the future. They tried to raise US$100 million to support the IPO, but it looks like this raise is still possible.
The final deadline to remove NFTs from Kraken is February 27, 2025.
What went wrong with the NFT marketplace?
There has been a general malaise within the once red-hot NFT sector this year, and it's no surprise that it's starting to take its toll. Major blockchains such as Solana and Ethereum are reporting a steady decline in NFT volume. June of this year was a particularly bad month for NFT trading, with trading volumes down 50%.
NFT bulls like Techreport are still in the minority, predicting continued growth in the NFT market and claiming that NFT users will increase this year. There have been reports of prominent early adopters offloading NFTs, which seems to ignore reality.
For example, in August, Chain CEO Deepak Thapiyal is believed to have sold his most expensive CryptoPunk NFT at a loss. Billionaire Mark Cuban is also believed to have sold a number of NFTs this year.
However, sales spiked in October. This bucked this year's trend, with sales up 18%. Much of the action took place on DMarket, which recorded $33 million in trading volume. Bitcoin and Ethereum NFT sales are declining.
