A Drop in the Bucket: The Truth About Funding Amidst NFT Market Bottoming Signs in 2026

It’s already 2026, and NFTs should have become a thing of the past. Digital collectibles once traded at sky-high prices are now mostly assets with no takers; many project teams are fleeing amid a wave of transformation and shutdowns; the once-glamorous industry event NFT Paris also ended quietly due to funding exhaustion. During the consecutive years of downturn, the market consensus that “NFTs are dead” has long been established.

However, at the start of 2026, this already-declared-dead market unexpectedly stirs with a ripple. According to CoinGecko data, the overall market cap of NFTs increased by over $220 million in the past week. NFT Price Floor data further confirms that hundreds of projects have seen price rebounds, with some even recording triple-digit gains.

But what does this so-called recovery really mean for long-term trapped players? Can this rally truly reverse the decline of the NFT market?

Surface and Depth: The Liquidity Dilemma Behind Market Recovery

At first glance, the NFT market seems to finally welcome a long-anticipated rebound. After experiencing a bottom at the end of 2025, this week’s green rally has indeed rekindled hope among some steadfast players.

However, peeling back the layers of this rise reveals the truth. The current market warming is fundamentally a struggle among a very limited pool of capital, not a genuine revival driven by new capital influx. This judgment is not unfounded.

Looking at trading data, out of over 1,700 NFT projects, only 6 have weekly trading volumes exceeding one million USD, 14 projects have volumes in the hundreds of thousands, and even projects in the tens of thousands range number just 72. The overall liquidity drought can be described as a drop in the bucket— even top projects have only a few percent of their total supply actively traded NFTs, and most assets have transaction volumes in single digits or zero.

The Block’s 2025 report further confirms this predicament. Throughout the year, there was no sign of strong re-entry capital into the NFT market, and speculative enthusiasm cooled significantly. After the multi-chain bloom giving way to Ethereum dominance, total market trading volume plummeted from $8.8 billion in 2024 to $5.5 billion, a 37% drop; total NFT market cap shrank from about $9 billion to around $2.4 billion, a decline of over 70%.

These figures indicate that the so-called price rebound is merely a drop in the bucket and cannot fundamentally change the fact that the NFT market has stalled. Today’s NFTs have long become “old assets,” with only trapped old players still holding on; new capital has long lost interest in this market.

Capital Exodus: From Virtual Images to Physical Assets

In this long winter, stories of survival are playing out across infrastructure and blue-chip projects.

OpenSea no longer focuses on JPEG image trading but has shifted toward token trading through incentive mechanisms; Flow blockchain is exploring DeFi growth points; Zora has abandoned traditional NFT models and turned to a “content as token” new track. Even projects with star IPs are not immune—Pudgy Penguins successfully boosted toy IP awareness, but its NFT floor price continues to decline.

Reddit has ceased NFT services, Nike sold its RTFKT division—mainstream Web2 giants’ decisive exit has shattered the last illusions about mainstream adoption.

However, the demand for collection and speculation has not disappeared; capital has just shifted to new battlegrounds. Compared to virtual images on-chain, physical assets like trendy toys and trading cards are still hotly traded—Pokémon TCG trading volume exceeds $1 billion, with annual revenue surpassing $100 million.

Leading players in the crypto ecosystem are voting with their actions. Artist Beeple shifted focus to physical robot creations, with celebrity robot dogs like Elon Musk’s being snapped up; Wintermute co-founder Yoann Turpin invested $5 million to buy dinosaur fossils; Animoca Brands founder Yat Siu spent $9 million on Stradivari violins. All these indicate that investors now prefer assets backed by tangible items rather than virtual images.

New-Style Empowered NFTs Becoming the New Darling of Capital

After the bubble burst, the NFT market is not entirely devoid of capital but has seen funds flow into assets with practical utility or clear value support.

Speculation and arbitrage needs still exist: Some players believe the market has bottomed out and engage in short-term trading by capturing price mismatches, with relatively high risk-reward ratios.

“Golden shovel” attributes dominate: This is the most actively traded and liquid NFT type at present. Its essence has shifted from collectibles to financial certificates for future token airdrops. But these assets have a fatal flaw—once the snapshot is taken or the airdrop is distributed, if the project team cannot provide new utility, the floor price often plummets or even drops to zero. Therefore, they are more suitable for short-term trading rather than long-term holding.

Premiums driven by celebrity and top project endorsements: Recently, Ethereum founder Vitalik Buterin changed his profile picture to Milady NFT, causing its floor price to rise sharply; top DEX HyperLiquid’s Hypurr NFT series also continues to increase due to project recognition. The value drivers of these NFTs are attention economy, with obvious short-term premiums.

Long-term value storage of top IPs: CryptoPunks has been officially included in the permanent collection of the Museum of Modern Art (MoMA) in New York. Such NFTs have moved beyond hype, toward cultural recognition and collection value, with prices relatively resistant to decline and potential for long-term preservation.

Price recovery driven by acquisition narratives: When projects are acquired by stronger capital, the market re-prices accordingly. Pudgy Penguins and Moonbirds saw significant price increases after being acquired, with market expectations that their IP monetization and brand moat will be greatly enhanced.

On-chain real assets with dual value: Tokenizing physical assets provides NFTs with clear real-world backing, reduces downside risk, and enhances exit potential. Platforms like Collector Crypt and Courtyard allow users to trade card ownership on-chain, with physical items stored by the platform, achieving liquidity while retaining physical value.

Application scenarios of practical functions: NFTs are returning to tool attributes, serving specific applications—NFT ticketing systems, DAO voting rights, NFT-based AI agent identities launched on Ethereum ERC-8004, etc. These scenarios endow NFTs with tangible functions.

Bidding Farewell to Meaningless Hype, the Future of NFTs Is in Transition

Compared to chasing meaningless small images, NFTs with clear empowerment or upward potential are gradually becoming the focus of capital.

Although this market rebound seems modest, it signals an important shift: the NFT market is transitioning from “pure speculation” to “value empowerment.” Those still holding positions are shifting from blind followings to rational discernment—they no longer believe in meaningless images but are seeking new assets with practical utility, cultural value, or financial attributes.

In this process, the NFT market may not replicate its past prosperity, but it is evolving toward a more mature and rational direction. For investors, the key is whether they can identify assets with real value support amid this deep correction, rather than being swayed by market sentiment.