Silicon Valley Bank cuts NFT trading volume by 51%: Report
Silicon Valley Bank (SVB) was the backbone of many startups and venture capital funds around the world. The collapse marks the biggest bank failure since the financial crisis of 2008. While the crypto market has largely been spared a negative impact, the same cannot be said for the non-fungible token (NFT) space.
According to the latest edition of the DappRadar report, NFT traders went “numbless” in response to the banking crisis in the US.
NFT Space Amid Banking Chaos
The NFT industry followed a steady upward trajectory for most of 2023. In fact, sales recorded peaks as the broader market recovered while mainstream adoption of NFTs also saw a peak. However, the collapse of SVB and the untying of one of the largest stablecoins – USDC – was felt in the NFT market.
Since the beginning of March, NFT trading volume has fallen by 51%. Sales figures also took a hit, falling by almost 16%. DappRadar said NFT traders are becoming less active as market participants questioned the stability of stablecoins. The number of such traders on March 11 was recorded to be 12,000, a level not seen since November 2021. This was accompanied by the lowest one-day trading in 2023 – 33,112.
Despite low NFT trader activity, the data aggregation platform stated that volume was not affected to the same extent. This can be attributed to NFT marketplace Blur beating the once largest NFT marketplace OpenSea in terms of monthly volume for the third consecutive month.
Blue-Chip NFTs unaffected
The top NFTs remained resilient throughout the event. The floor prices of blue-chip NFTs, including Bored Ape Yacht Club (BAYC) and CryptoPunks, were barely affected. After a minor dip below $100,000 on March 11, the numbers recovered quickly.
While other blue-chip collections, such as Azuki and Art Blocks, were also unscathed. On the other hand, Moonbirds and the Proof ecosystem were hit hard due to their exposure to Silicon Valley Bank. Proof had previously said that the potential loss incurred would not affect the security of the client’s assets or the project’s roadmap.
But Moonbirds lost 18% of its value since the news unfolded. The floor price has since recovered, climbing to $6,207 (almost 4 ETH).
Meanwhile, Yuga Labs revealed the “super limited exposure” to the collapsed bank, meaning the project’s finances will not be significantly affected by the fallout.
