Bitcoin is the world’s largest cryptocurrency, and it began in 2025 after reaching record highs in late 2024. By early March, its value had fallen by more than 20% after climbing $100,000 in December, raising concerns about the stability of the broader market.
This downturn has had a ripple effect in the digital asset space, especially in Ethereum, the backbone of the NFT market. As Bitcoin and Ethereum prices fall, questions about how the NFT sector will respond. With market activity declining, investor participation decreases and environmental issues resurface, the NFT landscape faces major challenges.
The decline is attributed to economic instability, regulatory pressures and security incidents that have made investors confident.
Source: pexelsCurrent predictions about Bitcoin and Ethereum
Ethereum fell from $3,688.61 in January to about $2,090.61 in March after Bitcoin declined in early 2025, but this downward trend is consistent with Bitcoin’s struggles, with analysts noting that investor sentiment is different between the two cryptocurrencies. Some remain optimistic about the potential for Ethereum recovery, citing historical trends in Bitcoin’s halving event in 2017 and 2021.
Ethereum’s broader utility in smart contracts and DAPPs also distinguishes it from Bitcoin, real-world use cases in industries such as online gaming and digital trading. For example, at Ethereum Casinos, processing time allows players to deposit funds faster, starting without delay and withdrawing bonuses immediately. In addition, Ethereum’s support for smart contracts enables an automated and proven fair gaming experience, ensuring that game results are fair and transparent.
Despite the downturn, both Bitcoin and Ethereum are widely used in industries including Defi, online payments and digital collectibles.
Source: pexelsWhat factors contribute to the decline of Bitcoin?
In early 2025, economic instability played a key role in Bitcoin’s decline, such as new U.S. policies, imposing a 25% tariff from Canada and Mexico has led to uncertainty in financial markets, resulting in returns on risky assets such as cryptocurrencies.
Meanwhile, the Fed has hinted at potential interest rates to curb inflation. Historically, such actions have resulted in lower investment in digital assets as investors seek more stable assets, such as bonds and gold.
Cybersecurity remains a major issue in the cryptocurrency space. For example, in February 2025, a popular cryptocurrency exchange suffered a $1.5 billion hack, shocking investor confidence. A massive Bitcoin sell-off followed, further fueling its price decline.
In addition, institutional investors played an important role in Bitcoin’s late 2024 surge through ETFs. However, in the first quarter of 2025, ETF outflows exceeded $1.1 billion, indicating that institutional confidence in Bitcoin has weakened and increased pressure on asset prices.
How does this affect the entire market?
Activity in the NFT market has also declined as Bitcoin and Ethereum prices decline. Analysts predict that NFT market revenue fell by about $75 million in 2025, reflecting a decrease in speculative interest and investor caution. The number of active NFT wallets has also steadily declined for three years, and this trend is still continuing in 2025. Leisure investors are exiting the market, leaving behind a smaller base of specialized traders and institutional players.
Bitcoin’s downturn has also reignited debate on the environmental impact of blockchain technology, with some businesses and investors reconsidering their participation in NFTs due to concerns about proving work to high energy consumption of blockchains.
Several NFT projects and companies also felt the impact of the Bitcoin economy. For example, RTFKT has announced its closure in early 2025, highlighting the struggles facing NFT-based brands. Developers of blockchain-based games, including Axie Infinity and other games, are reducing due to a decrease in demand for NFT assets in games, while leading NFT markets such as Opensea and Blur have reported a decline in transaction volume. Founded collections such as the Boring APE Yacht Club (BAYC) maintain some market value, but smaller NFT projects face difficulties in attracting buyers.
Bitcoin’s volatility is a known feature, and its recent decline does not necessarily indicate a long-term collapse, and some believe that Bitcoin can recover later in 2025 if the economic situation stabilizes and improves investor sentiment. Speculative boom has slowed down, and projects focused on practical applications may better gain opportunities for long-term survival, but whether NFTS can be in a downturn in Bitcoin depends on how the industry adapts to evolving investor demand and market conditions.
