Market cycles affect cryptocurrencies and NFTs differently due to their structure, liquidity, and use cases. In crypto markets, cycles are often driven by macroeconomic factors, technological developments, regulations, and Bitcoin’s performance. During bull markets, major cryptocurrencies such as Bitcoin and Ethereum typically experience broad-based price increases as capital flows into the market. In bear markets, prices decline sharply, but high-utility cryptocurrencies tend to retain liquidity and continue trading actively due to their roles in payments, smart contracts, and decentralized finance.

NFTs, however, are more sensitive to sentiment and speculation. In bull phases, NFT markets often surge rapidly as investor confidence rises and discretionary spending increases. Collections linked to hype, influencers, or trending narratives can see dramatic price appreciation. When the market enters a downturn, NFT demand usually drops faster than crypto because NFTs are less liquid and harder to value. Many NFT projects may experience long periods with little or no trading activity.

Another key difference is recovery speed. Cryptocurrencies generally recover earlier in a new cycle as investors return to established assets with clearer utility and market depth. NFTs tend to lag, with only strong projects—those offering real utility, strong communities, or brand value—surviving and regaining attention. Overall, while crypto cycles reflect broader market fundamentals, NFT cycles are more extreme, driven by hype during booms and sharp contraction during busts, making NFTs more volatile across market cycles.