Kraken Bids Farewell to NFTs – Is the Digital Art Boom Over?
A cryptocurrency firm plans to completely halt the operation of its NFT marketplace early next year, a decision that might have a great impact on the NFT space.
Analysts find this move of Kraken somewhat unexpected, raising questions on what the future holds for NFTs considering Kraken is a major player in these type of tokens.
Closing Down On February 2025
The crypto platform Kraken made the tough decision of shutting down its marketplace on February 27, 2025, bidding goodbye to all those who patronize the marketplace.
Officials of the crypto firm said that starting November 27, the majority of NFT’s marketplace will be terminated such as bidding, listings, and selling of NFTs, as the marketplace gradually prepares to close its doors by the first quarter of 2025.
However, the crypto platform clarified that even though many of the marketplace’s services will no longer be available, its users can still withdraw their funds before February 27, 2025.
Kraken is shutting down its NFT marketplace almost two years after the platform was launched, saying it’s shifting more resources into new products and services https://t.co/JNnbYqjhoL
— Bloomberg (@business) November 26, 2024
Kraken Eyes Developing New Products
A Kraken spokesperson has confirmed the company’s decision and the fate of its marketplace next year.
The Kraken official said that it was one of the difficult choices they have to make considering how much the NFT marketplace has been part of the crypto firm.
The spokesperson explained that closing down its marketplace would allow the crypto company to explore new avenues, adding that the firm also wants to develop new products and services.
Moreover, Kraken assured that they have informed all its customers of the ongoing changes, adding that the platform’s support team will assist users of the NFT marketplace users in transferring their assets to other wallets or the Kraken self-custody wallet.
Workforce Cuts
The news of the NFT marketplace closure came just nearly a month after the cryptocurrency platform trimmed its workforce and appointed a new co-CEO.
In October this year, Kraken reduced its workforce by 15% after it laid off 400 employees, saying that it was part of their organizational restructuring.
At the same time, the crypto platform appointed a new co-CEO, seasoned Silicon Valley executive Arjun Sethi who will help Dave Ripley in co-managing the company as it navigates towards becoming the world’s largest crypto platform.
Stagnation
Analysts said that NFT markets used to thrive but this year, it experienced a downturn and even recorded one of its lowest performances in June.
Crypto analytics platform Artemis revealed that NFT markets recorded a 50% decline in June, coinciding with the significant decline also experienced by major cryptocurrencies like Bitcoin, Ethereum, and Solana.
Meanwhile, Paul Thomas, CEO and founder of Somnia, remarked early this year about the diminishing hype surrounding the digital collectibles, noting that users’ demand for the utility of NFTs might have contributed to its slowdown.
Thomas added another problem of NFTs is the “lack of originality”.
In the previous months, known personalities in the crypto space have started offloading their NFTs such as billionaire Mark Cuban.
On the bright side, Techreport predicted that the NFT market might still hit $2.8 billion by 2028 and its users could reach 14.67 million this year.
Featured image from Wall Of Traders, chart from TradingView
