Remember Pets.com? Webvan? Boo.com? Those names probably trigger a mix of nostalgia and schadenfreude for anyone who lived through the dot-com boom and bust. We were all naive enough to believe that the internet would revolutionize everything – and rather successfully, too. It wasn’t a smooth road paved with good intentions all the way to heaven on earth. It was a road paved with bankruptcies, bloated valuations, and a ton of hype that all in the end just couldn’t deliver. Sound familiar?

And the present moment with NFTs is just as creepy-similar. We saw the beginning chaos of the NFT craze. We had million-dollar JPEGs and exuberant proclamations that these digital assets would change everything in art, gaming, and beyond. Now, all the air is coming out of that balloon. Transaction volumes have dried up, mainstream brands are retreating, and litigation is in the air. Q1 2025 saw a dismal $1.5 billion in trading volume compared to the $5.7 billion in one week back in early 2022. Ouch.

Nike was the dominant force in the NFT marketplace, pulling in $185 million of sales. Now, there are on the hook in a class-action lawsuit after they essentially killed RTFKT. Starbucks spent millions developing NFT “royalty programs,” only to turn around and drain the life support. Even the beleaguered Gamestop, citing the regulatory uncertainty (though maybe just using that excuse as a smokescreen?), shuttered its NFT marketplace. Even X2Y2, a crypto-native marketplace, is giving up on NFTs to pursue the AI dragon. Sounds familiar? Doesn’t it feel like 1999 all over again?

The internet survived the dot-com bust. In fact, it thrived. The companies that built sustainable businesses, focused on real value, and adapted to the changing landscape are now some of the biggest and most influential companies in the world. The same could be true for NFTs.

We mustn’t lose sight of the big picture that NFTs are not just JPEGs. The underlying technology – the ability to create one-of-a-kind, provably scarce digital assets – is hugely promising. Think about supply chain management. Think about knowing where the product you purchased came from all the way to your door, verifying it’s authentic and ethically sourced. NFTs could be the key. Or consider intellectual property rights. As a result, NFTs might offer a powerful, secure, transparent, and publicly available means to register and administer copyrights, patents, and trademarks.

The art market is notoriously volatile. Even though the speculation of today’s NFTs is distracting, the underlying technology might hold incredible potential to improve supply chain transparency and help combat counterfeiting.

Honestly? They probably got in over their heads. Hundreds of other mainstream brands swiftly jumped on the NFT bandwagon. Yet they usually found themselves ill-equipped with a true grasp of the technology, the community, and sustainable business models. They wanted to act because they noticed the wave of hype and didn’t want to miss out. But hype is a lousy starting point for establishing a long term business. There’s the fact, come on, that regulatory uncertainty is a huge killjoy. No innovation firm wants to place a big bet into a market under which the rules of engagement can change with the stroke of a pen.

And that's where the real opportunity lies. Real crypto-native companies, the ones who get the technology and the community, are doubling down. Take Jupiter, the Solana-based DEX, recently making headlines with its acquisition of DRiP Haus. They don’t view NFTs as a temporary trend, but rather as a core building block of the web’s future decentralized architecture. They’re constructing the most connected “super app” we’ve seen yet, bringing together DeFi, NFTs and more crypto services under one roof.

Projects like Pudgy Penguins and Doodles are changing in tandem. For one thing, they’re not just resting on their laurels, expecting their JPEGs to miraculously go up in value. They’re producing new games, debuting new tokens, developing their own whole ecosystems, all on the backs of their brands. Now, that’s the kind of innovation we’d like to see more of.

So, what's the takeaway? NFTs aren't dead. They're just maturing. The hype has drained away. Now, we’re separating the wheat from the chaff and taking our attention away from hype and back towards practical real world utility and sustainable business models. This isn't the time to panic. This is the time for hopeful realism to take root. Rather, let’s focus our efforts on the technology behind it all and direct our limited investments towards the companies and projects that seek to build it right.

If you’re still considering an investment in NFTs, please educate yourself. So don’t go out and purchase the latest trend just because it’s trending or purchase something because you think it will make you rich overnight. Get to know the technology, the project and the team behind it. And be prepared to lose your investment.

Beyond that, we need smart regulations that are clear and consistent across the nation, protecting consumers without choking innovation in its crib. A “wait and see” approach to policy could be the smartest strategy at this point. Allow the market to develop and then, once it’s developed, introduce appropriate regulations focused on the unique challenges and potential advantages of this new technology.

Similarly, the NFT market boom immediately following President Trump’s election, remind us just how much external events can impact the sector. This should remind all of us that causation does not equal correlation in this new frontier.

The dot-com bubble burst was ugly, sorry and sad, but it opened up the door for the internet we enjoy and find essential today. Today, the NFT market is experiencing the same type of growing pain. Let’s take the cue from history and create a far more sustainable and valuable future of NFTs. The potential is better than ever—we just have to be smart about it.

So, what's the takeaway? NFTs aren't dead. They're just maturing. The hype has subsided, the weak players are being weeded out, and the focus is shifting to real-world utility and sustainable business models. This isn't the time to panic. It's time to be cautiously optimistic, to focus on the underlying technology, and to invest in the companies and projects that are building for the long term.

Responsible Investment: A Must

If you're thinking about investing in NFTs, do your homework. Don't just buy something because it's popular or because you think it will make you rich overnight. Understand the technology, the project, and the team behind it. And be prepared to lose your investment.

Regulation Needed, But Not Too Much

We also need clear and consistent regulations that protect consumers without stifling innovation. A "wait and see" approach to policy may be the wisest strategy at this point. Let the market evolve and then, implement regulations that are tailored to the specific challenges and opportunities that emerge.

The NFT market's surge after President Trump's election shows how much external events can influence the sector – a reminder that correlation doesn't equal causation in this nascent space.

The dot-com bubble burst was painful, but it paved the way for the internet as we know it today. The NFT market is going through a similar growing pain. Let's learn from the past and build a more sustainable and valuable future for NFTs. The potential is still there, we just need to be smart about it.