From $130 million violins to vanishing NFTs, the truth about asset reshaping

Entering 2026, the crypto market is witnessing a major migration of assets from virtual to tangible. When Animoca founder Yat Siu spent $9 million to acquire a Stradivarius violin, it reflected a profound shift across the entire asset sphere—funds that once chased virtual images are now turning toward real-world collectibles with genuine value anchors. The once-glamorous NFT market is undergoing a brutal “value cleansing.”

Broken Dreams of Virtual Images, Reasons for Funds Moving to Physical Collectibles

NFT projects that once sold for sky-high prices have mostly become neglected digital assets. During consecutive years of decline, many NFT projects have faded out amid waves of transformation, sales, and shutdowns. Even the flagship NFT Paris event announced its cancellation due to exhausted funds.

“NFT is dead” seems to have become a market consensus, but this statement is only half correct—the true death is of the speculative logic that has no tangible backing.

More precisely, the decline of NFTs signifies the bursting of the virtual asset illusion, not the disappearance of collecting and speculative demand. When on-chain virtual images lose their appeal, funds do not vanish from the market; they are steadily shifting toward the physical world.

Compared to virtual NFTs, the market for physical collectibles remains hot. Take Pokémon TCG as an example, with trading volume exceeding $1 billion and annual revenue over $100 million. It’s not just ordinary collectors adjusting strategies; even crypto elites are voting with their feet. Crypto artist Beeple has turned to physical robot creations, with celebrity robot dogs like those of Elon Musk selling out; Wintermute co-founder Yoann Turpin invested $5 million in dinosaur fossils; and Animoca founder invested $130 million in top-tier art like a violin—when prices of physical assets fluctuate at this level, the “floor price” narrative for virtual images appears pale in comparison.

This shift reflects investors’ renewed recognition of the long-term value storage of physical assets and top-tier collectibles. Instead of chasing intangible virtual images, it’s better to bet on physical collectibles exhibited in museums and recognized by global collectors.

The Illusory Prosperity of Early 2026, Hidden Liquidity Crisis in Data

By 2026, the long-dormant NFT market finally shows signs of revival. According to CoinGecko data, since early 2026, the overall NFT market cap has increased by over $220 million in the past week, with several projects experiencing triple- to quadruple-digit gains.

For veteran players who have endured years of decline, this green market feels like a different world, offering some solace to those trapped in positions. But beneath the surface of this price rebound, the market rally is more like a game of small-scale capital rotation rather than a genuine recovery driven by new capital influx.

Extreme liquidity scarcity is a fatal flaw the market cannot ignore. According to NFT Price Floor data, out of over 1,700 NFT projects, only 6 have weekly trading volumes exceeding $1 million; 14 projects have trading volumes in the hundreds of thousands; and only 72 are in the tens of thousands. Even among top projects with higher trading volumes, the proportion of actively traded NFTs to total supply is only single digits, with most NFTs seeing zero transactions.

These cold numbers reveal a brutal reality: the so-called market recovery is actually a game of replacing existing capital. The Block’s 2025 report further confirms this—no significant new inflow of funds was observed in the entire year, and speculative enthusiasm cooled sharply. Total NFT trading volume dropped from hundreds of billions of dollars in 2024 to $5.5 billion in 2025, a 37% decline; market cap shrank from about $9 billion to roughly $2.4 billion.

Today’s NFTs have long become “old assets,” trapped by long-term holders, while new capital has largely exited.

Infrastructure Exodus and Projects Still Struggling to Survive

In this deep winter, from infrastructure to blue-chip projects, different survival strategies are unfolding.

OpenSea, the leading marketplace, no longer focuses solely on JPEG images but is transforming into token trading through airdrops; the once-mainstream NFT chain Flow is exploring DeFi growth points; Zora has abandoned traditional NFT models and shifted toward a “content as token” new track. These industry leaders are abandoning simple NFT narratives.

Even among the remaining top-tier NFTs, a “hype without substance” phenomenon persists. Pudgy Penguins, while successfully building IP recognition and selling physical toys, still struggles with floor and token prices falling. Reddit has ceased NFT services, and giants like Nike have exited Web2 NFT projects like RTFKT, further shattering market hopes for mainstream adoption.

But the market is not entirely dead. Capital is merely searching for new directions, flowing into projects with clear value support or practical application scenarios.

Why Do These NFTs Still Survive After the Bubble?

After the bubble burst, the NFT market is not experiencing a complete capital drought but is shifting toward assets with high profit-and-loss ratios or clear value support.

Arbitrage opportunities akin to “gold shovels”

Some funds focus on NFTs with expected token airdrops. These NFTs are no longer just collectibles but financial certificates for future airdrops, often granting access to whitelists or airdrops. However, these investments have clear time windows—once the snapshot is taken or the airdrop is distributed, if the project does not empower the NFT further, the floor price often plummets or even drops to zero. Therefore, these NFTs are more suitable for short-term arbitrage rather than long-term value storage.

Premium driven by celebrity or top project endorsements

The value of these NFTs relies on attention economics. Endorsements by celebrities or top projects can significantly boost visibility and liquidity, creating short-term premiums. For example, HyperLiquid’s Hypurr NFT series, airdropped to early users, has surged; Ethereum founder Vitalik Buterin changed his profile picture to a Milady NFT, causing its floor price to rise.

Top IP with long-term cultural recognition

NFTs like CryptoPunks, which have been officially included in the permanent collection of MoMA, have moved beyond simple hype. Investment logic now leans toward cultural identity and collectible value, with prices relatively resistant to declines, offering genuine long-term value storage—more akin to investing in physical art.

Value narratives reshaped by acquisitions

When projects are acquired by stronger investors, the market re-prices them, expecting their IP monetization and brand moat to strengthen. Pudgy Penguins and Moonbirds, for example, saw significant price increases after acquisition.

On-chain tokenization of real-world assets

Tokenizing real-world assets on-chain provides clear tangible value support, reducing downside risk and increasing mainstream appeal. Platforms like Collector Crypt and Courtyard enable users to trade ownership of physical items like cards, with physical custody managed by the platform. This direction could even become mainstream—when physical assets like violins or artworks are represented on-chain, the meaning of NFTs will be fundamentally reshaped.

Practical functions returning to tool-like attributes

NFTs are returning to their tool-like functions, serving specific applications such as event tickets, DAO voting rights, or AI on-chain identities (e.g., Ethereum ERC-8004’s AI agent identity). These reflect a shift from speculative assets to functional assets.

Compared to chasing meaningless small images, NFTs with practical utility or clear upward potential are gradually becoming the focus of capital. This transition is slow and painful, but the direction is clear—NFTs’ future lies in deep integration with the physical world, just like physical art and violin prices, ultimately returning to tangible, measurable value anchors.