What are NFTs? These NFTs are making a comeback in 2026

When we talk about what an NFT is, the previous answer was “expensive virtual images,” but today this definition is being completely rewritten. As we enter 2026, the long-dormant NFT market is beginning to ripple again, with market capitalization increasing by over $220 million in the past week, and hundreds of projects recording price rebounds. But beneath the surface of apparent prosperity, the real story is: NFTs are undergoing a transformation from speculative tools to practical assets.

Those participants who remain in the space have long stopped chasing meaningless small images. What are they playing with now? They are shifting toward NFTs with real value support or clear expected returns. This shift in scene is the key to re-understanding “what is an NFT.”

Bottoming Out or False Prosperity? Liquidity Crisis Is the Truth

Surface market data looks optimistic. According to CoinGecko, hundreds of NFT projects have seen price recoveries in just the past week, with some projects even recording triple-digit gains. For veteran players who have experienced continuous declines, this feels like a different world.

But deeper data reveals a much gloomier truth. Among over 1,700 NFT projects, only 6 have weekly trading volumes reaching the million-dollar level, 14 at the hundred-thousand-dollar level, and 72 at the ten-thousand-dollar level. Even top projects have active trading volumes that account for only single digits of their total supply. The 2025 report from The Block shows that the total NFT market trading volume plummeted from $5.5 billion in 2024 to $5.5 billion in 2025 (note: 2025 data), with total market cap shrinking from $9 billion to $2.4 billion, a 73% decline.

These figures reveal a harsh reality: the so-called rebound is merely a game among existing capital within a very small range, not a true revival driven by new capital entering the market. New funds are no longer buying into the story of NFTs.

Capital Migration: From On-Chain Virtual Assets to the Real World

Behind the liquidity crunch is a large-scale shift of capital. The decline of traditional NFTs does not mean the disappearance of collecting and speculative demand; rather, these demands have found new habitats.

OpenSea no longer insists on JPEG image trading, instead launching token-related services; Flow has shifted from mainstream NFT chains to DeFi exploration; Zora has abandoned traditional NFT models to embrace the “content as token” new track. Even iconic NFT events like Paris have been forced to cease due to funding exhaustion. More symbolically, Reddit has stopped NFT services, and Nike has sold RTFKT—these decisive exits by Web2 giants have shattered the last illusions of mainstream adoption.

But this is not a disappearance of NFT demand; it is a shift driven by investor voting with their feet. Pokémon TCG trading volume exceeds $1 billion, and physical collectibles and card markets continue to be hotly traded. Even crypto elites are returning to physical assets: digital artist Beeple’s robot creations are sold out; Wintermute co-founder Yoann Turpin spent $5 million on dinosaur fossils; Animoca Brands founder Yat Siu spent $9 million to acquire a famous piano—these top players’ choices clearly indicate that the appeal of on-chain virtual assets has fallen far behind the scarcity and value of real-world assets.

Redefining NFTs: What Is Truly Worth Your Investment

In this divided market, the answer to “what is an NFT” has evolved. Funds no longer blindly chase any NFT but flow toward assets with high yield ratios or clear value support.

Token Airdrop Certificates (“Golden Shovel” attributes) are currently the most actively traded NFT category. These NFTs have essentially transformed into financial certificates, mostly implying future token airdrops or whitelist eligibility. The risk-reward ratio seems attractive, but pitfalls are obvious—after the snapshot or airdrop, if the project team does not give the NFT new functionality, the floor price often plummets or even drops to zero. These NFTs are suitable for short-term arbitrage and are not recommended as stores of value.

NFTs endorsed by celebrities or top projects rely on attention economy. For example, Ethereum founder Vitalik Buterin changing his avatar to Milady NFT caused its floor price to rise; HyperLiquid’s Hypurr NFT also surged. Increased visibility directly translates into liquidity and short-term premiums.

Top IP-based NFTs have moved beyond mere speculation. CryptoPunks, for instance, have been included in the permanent collection of the Museum of Modern Art (MoMA) in New York, shifting the investment logic toward cultural recognition and collection value, making their prices more resistant to downturns and suitable for long-term storage.

Acquisition-driven narratives are also eye-catching. After being acquired by strong capital, Pudgy Penguins and Moonbirds saw significant price increases, with the market re-pricing their IP monetization potential and brand moat. Although physical toy sales have not saved their floor prices, the expectations generated by acquisition events can still drive short-term upward movement.

Integration with real-world assets is a new growth point. Platforms like Collector Crypt and Courtyard allow users to trade ownership of items like Pokémon cards on-chain, with physical items stored by the platform. This provides NFTs with clear tangible value support and reduces downside risk.

Practical functions bring NFTs back to tool-like attributes. Ticketing, DAO voting rights, AI on-chain identities, and other specific use cases give NFTs real utility.

New Investor Guidelines: How to Identify Good NFTs

After understanding the new meaning of “what is an NFT,” investors’ decision-making frameworks have also changed. No longer chasing meaningless small images, they focus on three dimensions:

First, clear value support. Is it based on token airdrop expectations, tangible assets, or IP/cultural recognition? NFTs with support are more resilient to risks.

Second, liquidity environment. In today’s extremely liquidity-scarce environment, choosing projects with high participation and active trading is crucial. Leading projects with reliable liquidity are less risky.

Finally, risk-reward matching. Short-term arbitrage and long-term value storage are fundamentally different needs. Arbitrageurs should focus on token airdrops and acquisition events, while long-term holders should pay attention to top IP and NFTs combining real-world assets.

By 2026, the NFT market is no longer the “everything can be an NFT” era of the past. The winter has eliminated speculative bubbles, leaving assets with real functions or clear value. What is an NFT? The answer is now very clear: it is no longer just a virtual image, but a financial instrument rooted in real-world applications and value. Understanding this shift is essential to seize opportunities in the new NFT market.