NFT volume falls sharply after collapse of Silicon Valley Bank

by James · March 20, 2023

Following California Department of Financial Protection and Innovation’s shutdown of Silicon Valley Bank earlier this month, startups are still uneasy about the future. Similarly, the non-fungible token (NFT) space is struggling to understand the banking crisis.

According to a report from DappRadar on Thursday, NFT trading volume has fallen by 51% since the beginning of March. Sales figures have also taken a hit, falling by almost 16%.

Trading volume refers to the total value of transactions that occur in the market. NFTs are unique digital assets recorded on a blockchain, and can include things like digital art, collectibles, and virtual real estate.

Trading volume is usually measured in a specific currency, such as US dollars or Ethereum, since many NFTs are traded on the Ethereum blockchain. Volume can vary widely based on a number of factors, including the popularity of particular NFTs, changes in market conditions and changes in investor sentiment.

NFT trading volume is often seen as an indicator of the overall health and growth of the NFT market, as well as a gauge of investor interest and activity. As the market for NFTs continues to develop and mature, it is likely that trading volume will continue to be an important metric for understanding trends and identifying opportunities for growth and investment.

A temporarily less active marketplace?

Traders are also becoming less active, as market participants increasingly question the stability of stablecoins. On March 11, the next day Federal Deposit Insurance Corp. took control of Silicon Valley Bank, the number of traders was approximately 12,000, a number not seen since November 2021. Individual NFT trades totaled 33,112 that day – the lowest daily number in 2023.

Shortly after the news of SVB’s collapse, Proofthe collective behind the popular collection Moonbirds, shared that the company had some funds invested in the bank. Moonbirds lost about 18% of their value over the weekend.

DappRadar also noted that several top-tier NFTs have remained strong through the latest fiscal fiasco. Floor prices for blue-chip NFT issuers Yuga Labsincluding those of Bored Ape Yacht Club (BAYC) and CryptoPunks, slightly dipped. After a minor dip below $100,000 on March 11, the NFTs recovered quickly.

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This article was originally published on Benzinga and appears here with permission.