A cryptocurrency company is preparing to completely shut down its NFT marketplace early next year, a move that could significantly impact the NFT industry.
This decision by Kraken has taken many analysts by surprise, leading to speculation about the future of NFTs, especially since Kraken has been a significant player in this sector.
Closing Down in February 2025
Kraken has announced the challenging decision to close its marketplace on February 27, 2025, bidding farewell to its users. Starting November 27, many major marketplace activities such as bidding, listing, and selling NFTs will be phased out, with the platform closing by early 2025. However, Kraken has made it clear that users will still be able to withdraw their funds up until the closure date.
"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," — Bloomberg (@business), November 26, 2024.
Kraken’s Focus on New Ventures
A Kraken spokesperson confirmed the company’s plans regarding its marketplace. This decision was not made lightly, given the role the NFT marketplace has played within the company. Shutting down will enable Kraken to explore new opportunities and invest in developing new products and services. Kraken has assured its customers are informed about these changes and that the support team is ready to help marketplace users transfer their assets to other wallets or Kraken’s self-custody wallet.
Workforce Reductions
The announcement of the marketplace’s closure follows closely behind Kraken’s decision to cut its workforce and appoint a new co-CEO. In October, the company reduced its workforce by 15%, laying off 400 employees as part of a broader organizational shake-up. In tandem, they appointed Arjun Sethi, a seasoned executive from Silicon Valley, as the new co-CEO to work alongside Dave Ripley, steering the company toward becoming the world’s largest crypto platform.
Market Stagnation
NFT markets, once bustling with activity, have seen a slowdown this year, with June marking one of their lowest performance months. According to crypto analytics firm Artemis, NFT markets faced a 50% decline in June, which mirrored the significant downturn experienced by major cryptocurrencies like Bitcoin, Ethereum, and Solana.
Paul Thomas, CEO and founder of Somnia, discussed the waning excitement around digital collectibles earlier this year, attributing the slowdown to a shift in user interest toward NFT utility. Moreover, he pointed out the "lack of originality" as another challenge NFTs face. In recent months, notable figures in the crypto world, including billionaire Mark Cuban, have started selling off their NFT holdings.
Despite these challenges, there’s a silver lining. Techreport has forecasted that the NFT market could still reach $2.8 billion by 2028, potentially attracting 14.67 million users this year.
Featured image from Wall Of Traders, chart from TradingView
