From digital art to Rolex: How physical collectible tokenization is driving the transformation of the NFT market?

From 2021 to 2022, the NFT market experienced a speculative frenzy driven by profile-picture projects, with total trading volume once exceeding $16 billion. However, when market excitement cooled, many projects that lacked real demand quickly collapsed to zero. In 2025, total NFT trading volume fell to $5.5 billion, down 37% from 2024.

A profound shift in market structure is underway. According to Dune Analytics data, in May 2026, the NFT market attracted more than 467,000 unique users, reaching the highest monthly user count since 2023. User growth is related to improvements in platform experience, but the deeper reason is that the technical value of NFTs is being re-evaluated.

In a clear statement during an interview at Consensus Miami, Adam Hollander, OpenSea’s Chief Marketing Officer, pointed out that the next NFT cycle will be driven by tokenized real-world physical assets—including Pokémon trading cards, Rolex watches, digital tickets, and game items—rather than the speculative boom led by profile-picture NFTs from 2021 to 2022. This assessment reflects a core logic shift in the industry: NFTs as a proof-of-ownership technology are still valid, but application scenarios must move away from pure digital speculation toward verifiable physical-asset anchoring.



## Why the Secondary Market for Physical Collectibles Has a Foundational On-Chain Value Basis

Whether the value of a physical collectible can be effectively carried on-chain depends on whether its offline market already has mature liquidity, price-discovery mechanisms, and scarcity-based pricing systems. The Pokémon card market happens to meet these conditions.

The global trading card market reached $15.8 billion in 2024 and is expected to grow to $23.5 billion by 2030, implying a compound annual growth rate of about 7.6%. In the high-end segment, the value of rare cards is even more striking. In February 2026, a “Pikachu Illustrator” card graded PSA 10 sold for $16.492 million, setting a global record for trading card auctions. Only 39 copies of this card were issued worldwide. Card Ladder data shows that from 2004 to 2025, the cumulative return on Pokémon cards exceeded 3,000%, far surpassing the increase of the S&P 500 index over the same period.

The card market has already formed a complete industry chain spanning issuance, secondary trading, and professional grading. Third-party grading institutions such as PSA and BGS provide standardized condition determinations, while auction platforms and online trading marketplaces provide liquidity. This maturity makes trading cards a natural category for on-chain tokenization of physical assets—on-chaining is not about creating a brand-new market, but about providing higher trading efficiency and transparency to an existing stock market with a scale of hundreds of billions of dollars.

## Can the Secondary Market for High-End Watches Support NFT Tokenization?

The high-end watch market, exemplified by Rolex, also has structural conditions suitable for on-chaining. Rolex is the luxury watch brand with the highest trading volume globally, and its secondary-market pricing system is complex and clearly tiered.

Take the popular GMT-Master II “Pepsi” as an example. In March 2026, rumors that it would be discontinued drove buying demand to surge by over 500% compared with the 2025 average. Since the start of the year, market prices have risen by about $3,000, while the number of active listings has fallen by about 25%. Meanwhile, in the regular-model segment, according to WatchCharts data from April to May 2026, there are significant differences between secondary-market valuations and official pricing across different models—e.g., the official price of the Sea-Dweller 126600 is about $14,550, while its secondary valuation is about $11,800; as for popular models such as the steel Daytona, they still maintain stable premiums.

This complex, tiered pricing structure is precisely the pain point that tokenization can address. The main problems facing the secondary market today include: lack of information transparency, high cross-border transaction costs, and high thresholds for authenticity verification. By registering each watch’s identity information, maintenance records, and grading certification data on the blockchain through on-chain records, transaction friction can be significantly reduced. At the same time, a 24/7 nonstop trading mechanism can be introduced to the high-end watch market, which traditionally has limited liquidity.

## What Regulatory and Custody Challenges Does Physical Collectibles Tokenization Face?

The core constraints for on-chaining physical assets are not technical—they are compliance and enforcement. This is closely related to the broader trend of RWA (real-world asset) tokenization. According to market data, in the second quarter of 2026, the broad RWA market capitalization had risen to $30.45 billion, up 462% from the start of 2025. Among them, tokenized treasuries are the largest, at $14.56 billion, accounting for 47.8% of the market; commodity tokenization totals $5.1 billion.

However, the regulatory environment for physical collectibles tokenization is even more complex. In mainland China, regulators apply a “strictly prohibited domestically and tightly regulated abroad” principle to RWA tokenization, explicitly banning related activities within domestic territory. In the United States, Europe, and other Asian jurisdictions, legal characterization remains ambiguous, and cross-border regulatory conflicts are prominent. The inherent conflict between blockchain’s global nature and the geographic specificity of legal regulation means RWA projects need to face multiple legal challenges, including securities law compliance, anti-money-laundering obligations, and consumer protection.

Custody is another major challenge. To handle the warehousing, insurance, authentication, and periodic audits required for physical assets in the real world, specialized infrastructure must be established. For example, in the Pokémon card market, Singapore has reported more than 600 fraud cases related to card trading since late 2025, with losses exceeding $800,000. In a recent theft case in Hong Kong, the perpetrators even abandoned cash and specifically targeted unopened rare card packs. These cases show that secure storage and authenticity verification of physical assets are unavoidable prerequisites for on-chaining.

## How Can an Economic Model for Tokenized Physical Collectibles Be Built?

From an economic perspective, tokenizing physical collectibles must address two fundamental issues: the 1:1 anchoring mechanism between on-chain tokens and offline physical assets, and liquidity design.

For the anchoring mechanism, issuers must establish strict custody and audit systems. Each NFT must correspond to a physical item that has been professionally graded and stored with insurance. Holders can redeem the physical item by destroying the NFT or through designated channels. The core of this mechanism is trust: market participants need to be confident that on-chain assets will not become disconnected from the underlying physical items due to improper conduct by the issuer.

On the liquidity side, tokenization breaks the geographic and time constraints of trading physical collectibles. A Pokémon card graded PSA 10 that sells at an auction in New York may take weeks, whereas on-chain transactions can complete cross-border transfers within seconds. More importantly, the divisibility of NFTs allows high-value collectibles to be bought through fractional ownership, lowering entry barriers and expanding the pool of potential buyers. Together, these mechanisms form the economic rationale for on-chaining physical assets—not to create new speculative instruments, but to improve the resource allocation efficiency of existing markets.

## Why Platform Infrastructure Becomes the Key Support for Physical NFT Deployment

The broad adoption of physical NFTs depends not only on market demand, but also on the maturity of the underlying infrastructure. OpenSea’s current strategic focus is to build a platform that aggregates users’ crypto assets, NFTs, and collectibles across wallets and across chains within a unified interface. This capability for “one-stop aggregation” is especially critical for tokenizing physical collectibles—users need to manage both the offline rights to physical assets and the on-chain trading records.

From a user experience standpoint, simplifying fiat on-ramp flows and displaying asset prices in USD are important measures to improve user acceptance. “When people want to buy a $20 Pokémon card, they don’t want to see it priced as 0.00 of some number of ETH,” Hollander said in the interview. The platform needs to communicate using familiar language and payment methods.

From a more macro perspective, in May 2025 OpenSea’s OS2 platform restarted across 14 blockchains, and by the week of 2026, the number of independent collectors had grown by 40% compared with 2026 January, indicating a positive response from users to improvements in cross-chain experience. As of May 18, 2026, relevant market data shows that improvements in platform-level usability are laying the groundwork for expanding applications in the next phase.

## How Will the Next NFT Cycle Reshape the Structure of the Collectibles Industry?

Looking further ahead, the development of tokenized physical collectibles may trigger fundamental structural changes in the collectibles industry. The liquidity challenges faced by high-net-worth collectibles are being resolved through on-chain trading, while professional grading institutions and custody service providers are gradually becoming core foundational infrastructure for the entire ecosystem.

For the Pokémon card market, tokenization offers a feasible path to address current pain points. The global trading card market size has exceeded $15.8 billion, but frequent theft, online scams, and counterfeit card issues are eroding market trust. When card ownership information is recorded on the blockchain and the physical cards are stored in professional custody facilities with insurance coverage, information asymmetry between trading counterparties is substantially reduced.

For high-end watch markets such as those for Rolex, the value of tokenization lies in bringing off-market trades—traditionally dependent on dealer channels and personal relationship networks—into a public and transparent on-chain marketplace. Today’s secondary-market issues, such as price opacity, authenticity disputes, and high cross-border transaction costs, can be addressed to varying degrees through tokenization. Of course, how quickly this process moves depends on the clarity of the regulatory framework and the completeness of custody infrastructure, but at the level of structural trends, the directional shift from digital speculation toward real-asset anchoring is becoming increasingly clear.

## Summary

The NFT market is undergoing a structural transformation from speculative digital art toward tokenization of physical collectibles. In its public remarks in May 2026, OpenSea leadership explicitly stated that real-world assets such as Pokémon trading cards and Rolex watches will become the core drivers of the next growth cycle. The logic behind this assessment is that the intrinsic value of NFTs as proof-of-ownership technology has not disappeared—it simply needs to move away from price-driven games back to asset anchoring itself. The Pokémon card market has reached a $15.8 billion scale and cumulative returns exceeding 3,000%; the secondary market for Rolex features complex liquidity segmentation. The maturity of these offline markets provides a solid foundation for on-chaining. However, regulatory compliance, physical custody, and infrastructure maturity remain key variables constraining development. With continued optimization of platform experience and gradual clarification of regulatory frameworks, tokenized physical collectibles are poised to become a more sustainable growth direction for the NFT industry.

## FAQ

Q: What is the fundamental difference between tokenized physical collectibles NFTs and the profile-picture NFTs of 2021?

A: The value of profile-picture NFTs mainly comes from community consensus and speculative expectations, lacking support from underlying physical assets. In contrast, tokenized physical NFTs are anchored to real physical assets such as Pokémon trading cards and Rolex watches. Holders can redeem the physical items by destroying the NFTs, giving them a value foundation tied directly to the actual assets.

Q: How does on-chaining tokenized Pokémon cards and Rolex watches solve authenticity issues?

A: The on-chaining process typically works in coordination with third-party professional grading institutions such as PSA and BGS. Before physical items are received into custody, they must undergo strict authenticity verification and condition grading, and the grading data is recorded on-chain. Physical items in the custody facility are periodically audited, and NFT holders can trace complete authentication and storage records through the blockchain.

Q: What are the main regulatory obstacles tokenized physical collectibles face today?

A: The main obstacles include: significant differences in how different jurisdictions legally characterize tokenized assets, with some countries imposing strict restrictions on RWA tokenization; multiple legal relationships involved in physical custody and cross-border transactions, resulting in higher compliance costs; and unresolved legal disputes over whether tokenized assets are securities.

Q: How can ordinary users participate in the tokenized physical collectibles market?

A: As platform infrastructure improves, users can purchase the relevant tokens through mainstream NFT trading platforms that support fiat on-ramps. Some platforms have implemented USD-priced displays and fiat payments like Apple Pay, lowering participation barriers. However, users still need to pay attention to custody mechanisms, liquidity, and related legal risks, and make independent judgments after fully understanding the project’s information disclosures.

Q: What is the expected market size for tokenized physical collectibles?

A: According to industry research data, the broad RWA tokenization market reached $30.45 billion in the second quarter of 2026. The collectible segment—specifically the trading card market—was $15.8 billion in 2024 and is expected to grow to $23.5 billion by 2030. As a subcategory of RWA, tokenized physical collectibles have substantial growth potential, but the actual pace depends on the regulatory environment and the progress of infrastructure improvements.