NFT Market and Switzerland: Crypto Valley's Role in Digital Collectibles
The NFT market has undergone one of the more dramatic cycles in the history of digital assets — a parabolic ascent through 2021, a collapse of 95 per cent or more in trading volumes across 2022 and 2023, and a selective recovery that has fundamentally reordered the landscape. Switzerland’s role in this cycle has been quieter than its participation in the broader DeFi and Layer 1 protocol boom, but it has been distinctive in character: less speculative, more institutionally oriented, and more durable. Crypto Valley’s contribution to the NFT ecosystem has been shaped by the same structural factors — foundation law, FINMA guidance, and proximity to regulated finance — that define its broader Web3 identity.
The 2021 Peak and Its Swiss Dimensions
The NFT boom of 2021 was, in its speculative core, a global phenomenon driven by social media attention, cheap capital, and the euphoria of a bull market that touched almost every corner of the crypto ecosystem. Swiss-connected projects participated, though rarely as the most exuberant actors. Several NFT platforms and marketplaces with Swiss entities were established during this period, attracted by the same combination of legal clarity and community density that had drawn the earlier DeFi wave. Crypto Valley’s NFT scene during the peak was characterised by a relatively small number of projects with serious technical and legal infrastructure alongside a larger number of opportunistic entrants who would not survive the subsequent contraction.
What distinguished Swiss-domiciled NFT projects during this period was the tendency to engage legal and regulatory counsel from the outset — an instinct driven partly by FINMA’s reputation for active engagement and partly by the professional norms of the Zug community, where the lawyers, auditors, and advisors who had worked on token structuring since 2017 were readily accessible. This caution did not prevent participation in speculative markets, but it did mean that the projects that structured themselves most carefully were better positioned to navigate what followed.
The Collapse: 2022–2023
The NFT market correction that began in mid-2022 was steep and sustained. Trading volumes on major marketplaces fell by 95–98 per cent from their peaks. Floor prices for even prominent collections declined by 80–90 per cent in ETH terms, and further in fiat terms as ETH itself declined. The “JPEG hypothesis” — the idea that ownership of a token representing a digital image carried inherent and durable value — was stress-tested severely and found wanting for the vast majority of collections. Only a small number of projects, characterised by strong communities, genuine utility, or exceptional brand equity, maintained meaningful value through the trough.
For Swiss-connected NFT projects, the collapse had a particular quality: the legal structures that had been carefully established during the boom period now needed to be maintained or unwound in a market where revenue had largely disappeared. Foundation structures carry ongoing compliance obligations — annual accounts, foundation supervisory authority filings, board governance — and these costs became significant relative to income for many projects. A number of NFT-related foundations in Zug were quietly dissolved or merged during 2023 and early 2024. Others pivoted toward utility models that could generate more sustainable revenue streams.
What Recovered — and What Did Not
By 2024 and into 2025, a selective recovery had emerged in the NFT market. The recovery was highly concentrated: the majority of gains accrued to a small number of established collections with strong brand identity, active developer ecosystems, and genuine community engagement. Bored Ape Yacht Club, CryptoPunks, and a handful of comparable “blue chip” collections maintained relevance. Below this tier, the vast majority of collections that had launched at the 2021 peak effectively ceased to trade.
The segment that did recover most robustly was not speculative collectible art but utility NFTs — tokens representing access rights, membership credentials, gaming assets, and identity attestations. This shift aligned Switzerland’s NFT ecosystem particularly well with the recovery: FINMA’s guidance on utility token classification, while not directly addressing NFTs in exhaustive detail, provided a cleaner path for utility-structured NFT projects than for pure collectibles. The Swiss legal tendency to structure rights carefully — ensuring that token holders had clearly defined, enforceable entitlements — proved more valuable in the utility NFT context than in the speculative art market.
FINMA’s Classification of NFTs
FINMA has not issued dedicated guidance specifically on NFTs, but its existing token taxonomy provides the analytical framework that Swiss lawyers and project teams apply. The starting point is that most NFTs, as non-fungible tokens representing unique digital objects without a primary investment purpose, do not fall into the category of securities (asset tokens) and are not payment tokens. This means that the issuance and trading of most NFTs does not, in itself, trigger securities regulation or payment services licensing requirements in Switzerland.
However, this default classification is subject to important qualifications. Where an NFT confers rights to a share of revenues, voting rights in a commercial enterprise, or economic exposure to a pool of assets, FINMA may look through the token structure and apply securities analysis. The fractionalisation of NFTs — dividing ownership of a single high-value NFT into many fungible tokens — raises further questions and is treated with considerable caution under Swiss practice. Intellectual property rights associated with NFTs also require careful structuring: the token itself conveys ownership of the token, not necessarily underlying intellectual property, unless explicitly drafted to do so.
The case-by-case nature of Swiss regulatory analysis means that project teams seeking certainty must engage in specific dialogue with counsel and, in borderline cases, with FINMA directly through its no-action letter process. This creates a compliance cost but also genuine legal certainty for projects that complete the process — a distinct advantage over jurisdictions where regulatory guidance remains ambiguous or retroactively applied.
NFT Provenance and Intellectual Property Under Swiss Law
Switzerland’s legal framework for intellectual property — anchored in the Federal Act on Copyright and Related Rights — provides a sophisticated basis for addressing the provenance and authorship questions that NFTs raise. Swiss copyright law recognises the creator’s moral rights alongside economic rights, and these moral rights are inalienable: they cannot be waived even by contract. This creates an interesting tension in NFT markets where platforms and collectors have sometimes assumed that purchase of an NFT transfers all rights associated with the underlying work.
Swiss legal practice has developed nuanced approaches to this question, recognising that the NFT and the underlying work are legally distinct objects. A collector who purchases an NFT receives ownership of the token as recorded on the blockchain; they receive whatever economic rights over the underlying work are explicitly transferred by the creator in the purchase agreement; they do not automatically acquire moral rights or the right to exploit the work commercially unless specifically granted. This clarity, while adding complexity to NFT structuring, provides a more durable foundation for high-value digital art transactions than the ambiguity that characterises many other jurisdictions.
Institutional Engagement: Art Funds, Banks, and Museums
Perhaps the most distinctively Swiss dimension of the NFT ecosystem is the degree of institutional engagement from outside the crypto-native community. Several Swiss private banks have explored digital art acquisition programmes for their wealth management clients, treating carefully selected NFTs as alternative assets within broader portfolio contexts. These programmes remained cautious and limited in scope — particularly after the 2022 contraction — but they represent a category of institutional NFT activity that is more developed in Switzerland than in most comparable markets.
Swiss museums and cultural institutions have engaged with NFT technology primarily as a tool for provenance tracking, digital companion pieces for physical works, and experimental digital-native commissions. Several major institutions have run limited NFT programmes, typically in collaboration with established digital artists. The approach has been characterised by institutional caution — small scale, non-speculative, focused on cultural rather than financial value — but it has normalised the technology within a constituency that carries considerable cultural authority.
The intersection between NFTs and the broader tokenised securities framework is perhaps the most consequential institutional development. Under the Swiss DLT Act, it is possible to issue tokenised art fund interests as DLT rights — regulated securities that can be traded on licensed DLT trading systems. Several boutique asset managers have explored this structure for art fund products, blurring the boundary between NFT and regulated security in ways that FINMA is watching closely.
NFT Infrastructure in Crypto Valley
The infrastructure layer supporting NFT creation, trading, and custody in Crypto Valley includes several specialist providers. Digital asset custodians — including firms licensed or operating under FINMA’s DeFi-adjacent frameworks — have developed NFT-specific custody solutions for institutional clients who require regulated safekeeping. Blockchain development studios with Swiss addresses have built NFT minting and marketplace infrastructure for projects seeking a European technical partner with regulatory awareness. Legal and compliance firms specialising in token structuring have developed NFT-specific practice areas that handle the IP, securities, and AML/KYC dimensions of NFT project launches.
The AML dimension deserves particular note. The Financial Action Task Force’s guidance on virtual assets, as implemented in Switzerland through the Anti-Money Laundering Act and FINMA’s associated circulars, creates compliance obligations for Swiss-domiciled NFT marketplace operators. High-value NFT sales — particularly in the art context, which has been flagged internationally as a sector vulnerable to money laundering — require robust know-your-customer procedures. Swiss marketplace operators have generally implemented more comprehensive compliance programmes than their offshore counterparts, reflecting both regulatory requirements and the professional norms of the Zug ecosystem.
The Rise of Utility NFTs
The trajectory of the NFT market from 2024 onward has been shaped by the distinction between speculative collectibles and utility-bearing tokens. Utility NFTs — which confer membership rights, access to services, gaming asset ownership, or verified identity credentials — have grown as a proportion of overall NFT activity even as the speculative collectible market has remained well below its 2021 peak. Switzerland’s regulatory and legal framework is, if anything, better suited to utility NFTs than to pure collectibles: the utility token classification pathway is more developed, the contract law basis for defining and enforcing utility rights is clearer, and the institutional appetite for asset classes with defined utility economics is greater.
Gaming NFTs — representing in-game items, characters, or land parcels — remain a contested category. The sustainability of play-to-earn models has been questioned following the collapse of early experiments, and Swiss-connected gaming projects have generally adopted more conservative economic models that treat NFT items as genuine digital goods rather than speculative investment vehicles. Identity NFTs and verifiable credential systems, built on decentralised identity standards, represent a growing application area that intersects with Switzerland’s broader digital identity initiatives.
Outlook from a Swiss Institutional Perspective
The NFT market’s trajectory from a Swiss institutional perspective is one of consolidation around genuinely useful applications, with speculative collectible activity remaining a smaller and more sophisticated niche than during the 2021 peak. The projects most likely to succeed in the Crypto Valley context are those that leverage Switzerland’s structural advantages: legal clarity on token classification, IP frameworks that support high-value digital art transactions, institutional distribution channels through private banks and family offices, and the credibility that a Swiss domicile continues to confer in European institutional markets.
The cultural institutions that engaged with NFTs during the 2021–2023 period have, on balance, maintained their interest in digital art and blockchain-based provenance, even as speculative elements have receded. This creates a durable cultural foundation for a Swiss NFT ecosystem that prioritises quality, legal rigour, and institutional accessibility over volume and speculation. It is, in many respects, the most Swiss possible outcome.
Donovan Vanderbilt is a contributing editor at ZUG WEB3, a publication of The Vanderbilt Portfolio AG, Zurich. The information presented is for educational purposes and does not constitute investment advice.