Earlier last month Non-fungible tokens (NFTs) gained positive momentum after successive months of decline and over the heels of that comes the news of Pudgy Penguins overtaking Bored Ape Yacht Club (BAYC) as the second-largest NFT collection. So here’s a closer look at what’s happening in the NFT world.

Non-fungible tokens went to a 6-month high in November as they touched $563 million monthly volume due to the positive trend in the NFT market from Donald Trump’s win in the US elections.

Since NFTs were launched in 2021, they have been mirroring the general market sentiment of the crypto world with activity and trading volume surges during the bull cycles. November 2024 results were also the same with the NFTs recording $563.92 million worth of transactions from 427,000 unique sellers, reveals CryptoSlam data. It further underlined how the NFT market had risen 58% last month from the $356 million worth of transactions observed in October.

This reversed the ongoing downward trend which slowed down the NFT sector since March when it was at a high of $1.614 million. In the next 7 months after March 2024, the transaction volume of NFTs declined every month ultimately hitting a rock bottom of $300 million in September, two months before the US elections.

Although the NFT market has recovered thanks to Donald Trump’s victory-led bullish movement in the broader crypto market, it is far behind its 2021 high. At that time, the NFTs rose to record trading volume of more than $3 billion after sustained speculation in between August 2021 and May 2022.

While many NFTs were just JPEGs they were getting sold for millions of dollars and the trend affected the mainstream market after celebrities joined the bandwagon and started buying Bored Ape Yacht Club (BAYC).

But the NFT hype soon fizzled out as the crypto market stopped pumping it, resulting in its trading volume plummeting. Many tokens which were trading for thousands of dollars were reduced to less than $100 valuation and trading platforms closed business.

Market leaders like OpenSea had to let go 50% of their employees in 2023 and Kraken announced last week that they are closing down their NFT trading platform, only a year after the launch. The exchange cited “shift more resources into new products and services, including unannounced initiatives in development”, as the reason behind the shutdown.

However, the trend might have died and the NFTs aren’t that speculative anymore, yet companies are building utilities to these tokens and more such firms have come up in recent times. One example of this is Rad TV which has transitioned into NFT way of ownership of its digital content on all platforms. Tony Mugavero, the Founder of Rad TV revealed that his firm uses smart contracts embedded in NFTs which ensures that every stakeholder in the content value chain is fairly compensated for their effort.

Pudgy Penguins takes over BAYC

Amidst this, 6-month high NFT transaction volume news comes the data that Pudgy Penguins has overtaken, the well-known NFT Bored Apre Yacht Club (BAYC) in the market cap to be the second-largest NFT.

Pudgy Penguins witnessed an 8.4% increase in its floor price in the last 24 hours as it hit 22.1 ETH or $86,922 worth. This makes it a 44.9% weekly gain which made its market cap rise to $772.5 million, crossing the $755 million market cap of BAYC. Pudgy Penguins is now trailing behind CryptoPunks which is the largest NFT collection with a $1.5 billion valuation.

This surge in Pudgy Penguins can be attributed to an upcoming token airdrop which was announced last week. The NFT project is launching its token called Pengu on the Solana network later this month. As many as 88,888,888,888 tokens will be available for sale in the airdrop with 25.9% of the supply being allocated to the Pudgy community.

“With Pengu, the millions of Pudgy Penguin fans and the hundreds of millions of people outside of crypto that see and share the Pudgy Penguin every day finally have the opportunity to align themselves with the character,” the project announced last week.

Now, it remains to be seen if the Pudgy Penguins can resurrect that fallen glory of the NFT market which has seen a massive decline from its 2022 peak. However, the weekly trading volume has started to regain as seen in last week’s (Dec 1-8 week) recorded Ethereum-based NFT trading volume of $91 million. This was nearly a 50% jump from the $56.6 million recorded in the last week of November, making it the biggest weekly spike since March this year.