Recently, I noticed a fairly interesting phenomenon: the NFT market has shown signs of a recovery at the beginning of this year. To be honest, after all these years of a downcycle, everyone thought the NFT story was over. Those projects that once sold for sky-high prices have now become images nobody pays attention to; countless project teams have been forced out with embarrassment, and even an iconic event like NFT Paris has been quietly suspended.

But when you look at the data this week, it is indeed a bit surprising. According to CoinGecko statistics, just in the past week, the total market cap of the NFT market increased by more than $220 million. The NFT Price Floor data is even more straightforward: hundreds of projects have recorded price rebounds, and some have even risen from three digits to four digits. For old players who have been stuck in positions for years, this long-missed green market really feels like a different world.

However, if you look more closely, this rally looks more like an internal contest among existing capital within an extremely narrow range, rather than truly new money entering the market. Liquidity exhaustion is the fatal flaw. Out of more than 1,700 NFT projects, only 6 have weekly trading volumes in the million-dollar range, 14 have volumes in the hundreds of thousands, and 72 have volumes in the tens of thousands. Even for top projects, the number of NFTs with active trading as a share of total supply is still in single digits; most projects’ trading volumes are painfully low. The Block’s 2025 report also confirms this: total NFT trading volume for the whole year was only $5.5 billion, down 37% from 2024; total market cap shrank from $9 billion to $2.4 billion.

Put plainly, today’s NFTs have long become “old-timer assets.” Only old players are trapped in them; new capital simply doesn’t buy in.

Interestingly, money hasn’t fully left—it has just switched battlefields. OpenSea has given up on JPEG images and moved toward token trading; Flow is exploring DeFi; Zora has abandoned the traditional NFT model and shifted to “content as tokens.” Even top projects like Pudgy Penguins, whose physical toys are selling like hotcakes, still see their NFT floor prices falling. Reddit has stopped NFT services, Nike has sold RTFKT, and the decisive exits by Web2 giants have shattered the last fantasies of mainstream adoption.

But this doesn’t mean collecting and speculative demand has disappeared. Look at Pokémon TCG trading volume of over $1 billion—big players in crypto have also started returning to physical assets. The mascot robot dog made by Beeple was snapped up instantly; Wintermute’s co-founder spent $5 million to buy dinosaur fossils; and Animoca’s founder splurged $9 million to purchase a famous zither.

So what are NFTs now? Honestly, they’re no longer the kind of pure collectibles they used to be. The money is now flowing into assets that have real value backing. Some are doing short-term swing trading, betting that the market has already bottomed out; more people are focusing on NFTs with “golden shovel” attributes—financial instruments used to capture airdrop opportunities. But this kind of play comes with high risk: after the snapshot is completed or the airdrop is distributed, if there is no new value-added “fuel,” the floor price often plunges almost in a straight line.

NFTs endorsed by celebrities or top-tier projects still have buyers. After Vitalik changed his avatar to a Milady NFT, the floor price clearly rose; after HyperLiquid released the Hypurr NFT, it kept climbing. Top IPs like CryptoPunks have already been included in the permanent collection of the Museum of Modern Art in New York—projects with strong cultural recognition tend to be more resilient. And then there are projects acquired by big capital firms: the market will reprice them. After Pudgy Penguins and Moonbirds were acquired, both rose.

The most promising outlook comes from two directions: first, tokenizing real-world assets on-chain—for example, Collector Crypt and Courtyard, Pokémon card tokenization platforms that combine the virtual and the real; second, returning to functional use cases—NFTs for ticketing, DAO voting rights, AI on-chain identities, and other practical applications.

In the end, the answer to what NFTs are has changed. Those meaningless little pictures no longer attract anyone, but NFTs with real utility or clear expectations of price increases are gradually becoming the focus of capital. The market is being reshuffled—what survives are the projects that truly have value backing.