NFT Lending Plummets: Could This Signal a Broad Cryptocurrency Downturn?

The NFT lending market is facing a significant downturn, with transaction volume plummeting by 97% from its peak in January 2024 to just $50 million as of May 2025. Experts are concerned that this decline in the highly volatile sector could signal broader troubles for the crypto market overall. The drop is attributed to several factors: overvalued NFTs, a collapse in collateral values, and risk aversion from investors.