State of NFTs: Are They Actually Back?

The question everyone is asking in January 2026 is simple but loaded: are NFTs actually back?

As someone who has tracked this space closely through multiple cycles, I am seeing signals that are far more nuanced than the headlines suggest. There are signs of life, but not in the way most people remember. To understand what is really happening, we need to separate short-term noise from structural change.

The Numbers Tell an Interesting but Incomplete Story

The first week of 2026 delivered something the NFT market has been missing for months: a pulse. Aggregate NFT sales volume reached roughly $60 million in early January, breaking a three-month downtrend that had many declaring the sector effectively dead.

On Ethereum, CryptoPunks led activity, with weekly trading volume increasing by over 50% to approximately $3.9 million. Across major liquid collections, tracked NFT market capitalization increased by an estimated $200+ million during the first week of the year.

However, context matters. Tracked NFT market capitalization across major collections currently sits at roughly $3 billion, down around 70% from early 2025 levels and more than 80% below the 2022 peak near $16 billion. The recent uptick, while encouraging, appears driven largely by capital rotation within the ecosystem rather than meaningful inflows of fresh capital.

In other words, funds are moving, but they are mostly moving between existing assets.

Blue Chip NFTs: Who Is Actually Seeing Activity?

Looking at leading collections reveals where capital is concentrating and where it is not.

CryptoPunks remain the clear heavyweight, accounting for roughly 30% of Ethereum NFT trading volume during peak weeks. While activity has stabilized, prices remain approximately 80% below 2021 highs. Assets once considered untouchable at any price are now trading at levels that would have seemed unthinkable during the mania.

Pudgy Penguins stands out as one of the most credible post-hype success stories. The brand continues expanding beyond crypto-native circles through physical merchandise, licensing, and consumer partnerships. Recent announcements around collaborations in sports, gaming, and entertainment, alongside ongoing development of Abstract, a ZK-based consumer-focused blockchain incubated within the Pudgy ecosystem, highlight a strategy centered on long-term brand building rather than speculative trading. Despite floor prices remaining far below peak levels, Pudgy Penguins increasingly resembles an IP company that happens to use NFTs, not the other way around.

Bored Ape Yacht Club, by contrast, illustrates how difficult it is to sustain speculative premiums. Yuga Labs continues developing Otherside, including late-2025 expansions tied to the Koda ecosystem and broader brand integrations. Yet BAYC floor prices remain deeply suppressed relative to historical highs. Several celebrity-owned Apes that once traded for seven figures are now valued at a fraction of their original purchase prices.

Azuki has focused heavily on ecosystem expansion, particularly through its trading card game (aka TCG) initiative. In January 2026, the team hosted the Azuki TCG Invitational Tournament in Los Angeles, featuring 64 players and a $10,000 prize pool. While this demonstrates real product development beyond profile pictures, the market response has been muted. With a floor price around 0.8 ETH, down sharply from its brief early-2025 surge, the collection remains far below peak valuations despite continued efforts across gaming, physical merchandise, and AnimeChain infrastructure.

Nike, RTFKT, and the Corporate Retreat From NFTs

Few events capture the current NFT climate better than Nike's exit from RTFKT in late 2025. After acquiring the digital fashion studio at the height of NFT enthusiasm in 2021, Nike gradually wound down operations amid declining engagement and mounting legal pressure, including lawsuits from NFT holders.

Market reaction was telling. Clone X floor prices briefly surged more than 200% following reports of Nike's withdrawal, suggesting that some holders viewed corporate disengagement as a net positive, freeing the brand from a parent company that had clearly deprioritized it. Even so, prices remain more than 99% below Clone X's 2022 all-time highs.

This episode is not isolated. It reflects a broader trend. Many large corporations that rushed into NFTs during the hype cycle are now quietly backing away. Reports of major NFT events being canceled or scaled back due to market conditions further underscore how much supporting infrastructure has contracted.

Chimpers and Good Vibes Club: Community-Led Momentum

While blue chip collections dominate headlines, some of the most authentic momentum is emerging just below the top tier. Good Vibes Club and Chimpers are strong examples of collections gaining traction not through financial engineering, but through rapidly growing communities, consistent execution, and cultural pull.

Good Vibes Club has seen a notable increase in attention driven primarily by its community dynamics. The project's identity is tightly aligned with optimism, creativity, and openness, and that energy is translating directly into organic growth. Over recent months, a lot of new collectors have joined the community, amplifying its reach and visibility. At the same time, the team has been shipping consistently, expanding integrations, creative output, and presence across ecosystems such as Otherside. The result is a flywheel where culture leads and market interest follows, rather than the other way around.

Chimpers is following a similar, though stylistically distinct, path. The collection has benefited from steady community expansion and a clear long-term vision that resonates with holders. Rather than relying on short-term catalysts, the team has focused on maintaining engagement, strengthening its core audience, and reinforcing brand identity. This steady execution has translated into renewed interest and resilience during a period when many comparable projects have faded.

Both projects have recently introduced strategy token mechanics, which add an additional layer of liquidity tooling and optional participation for the market. However, these tokens are best understood as complementary infrastructure rather than the primary source of momentum. The underlying driver remains community growth, cultural relevance, and teams that continue to deliver.

In a market defined by thin liquidity and declining speculation, this distinction matters. Collections that are growing because people genuinely want to be there tend to be far more durable than those relying on financial incentives alone.

The Liquidity Crisis No One Wants to Address

Beneath all price charts lies a more uncomfortable truth: extreme illiquidity.

Out of more than 1,700 tracked NFT projects, only a handful reached weekly trading volumes above $1 million in early January. Fewer than 100 managed even modest five-figure volumes. Even within top collections, actively traded NFTs often represent single-digit percentages of total supply.

This has real consequences. A quoted floor price is largely theoretical if only a few assets trade each week. Any meaningful selling pressure can collapse prices almost instantly. For most holders, liquidity, not valuation, is the real constraint.

What the Data Actually Suggests

Many OGs in the NFT space are predicting a comeback in 2026, but much depends on how that term is defined. If a comeback means broader adoption of NFTs as infrastructure, used for gaming assets, authentication, ticketing experiments, and membership, there are clear signs of progress.

Pudgy Penguins' consumer products, Azuki's TCG initiative, and ongoing experiments by major institutions exploring NFT-based credentials all point in this direction.

If a comeback means a return to 2021–2022 price levels, volumes, and speculative frenzy, the answer is unequivocally no. Total NFT transaction volume in 2025 declined significantly year over year, and aggregate market capitalization continued to contract.

My Take Is Simple

The NFT market is not back in the way most people mean. The era of effortless six-figure JPEGs and celebrity-driven speculation is over, and it is unlikely to return.

NFTs are gradually finding their place as enabling technology rather than speculative endpoints. Projects with real revenue streams, strong brands, and utility that exists independently of hype are stabilizing. Most collections launched during the mania, meanwhile, are slowly fading into irrelevance.

The modest January rebound should be viewed for what it is: a small bounce after a brutal multi-year drawdown. Marketplaces pivoting toward broader crypto trading, and NFT platforms shutting down entirely are not signs of revival. They are signs of consolidation and adaptation.

For collectors and investors, the playbook has changed. Chasing floor price momentum is no longer a strategy. The focus now should be on projects with sustainable business models, partnerships beyond crypto-native audiences, and utility that holds value even in the absence of speculation.

The NFT comeback is not about prices returning to their 2022 highs. It is about the technology settling into legitimate use cases and the market learning, painfully, to distinguish signal from noise. That process is slow, messy, and far from finished. But it is underway, and that matters far more than any short-term price movement.