- The collapse of the Silicon Valley Bank saw NFT trading volumes reach a low not last seen since November 2021.
- Silicon Valley Bank is one of the major banks in the United States that collapsed in recent weeks.
NFT Trading Volumes Have Taken A Hit
A new report by DappRadar has revealed that nonfungible token (NFT) trading volumes tanked following the collapse of the Silicon Valley Bank (SVB). SVB’s collapse was a big issue in the crypto space because it was the biggest bank for tech startups, including several Web3 or crypto native brands, including Circle, the digital asset firm behind the second largest stablecoin, USDC.
The report highlighted that following the collapse of the bank, there were only 12,000 active NFT traders, a number not seen since November 2021. In addition to that, single NFT trades totaled 33,112 on that day, the lowest daily tally so far in 2023.
Since the start of the month, NFT trading volume has dropped 51%, with sales also declining by 16%.
The report added that it is also interesting to note that despite the low NFT trader activity, the volume was not affected in the same ratio, most probably as Ethereum NFT whales continue farming Blur Season 2.
DappRadar added that despite the overall decrease in NFT trading, the floor prices of blue-chip NFTs like BAYC and CryptoPunks were hardly affected, with only a slight dip below $100,000 on 11 March. The recovery was quick, showing the resilience of these top-tier NFTs.
Other blue-chip collections like the BAYC ecosystem, Azuki, and Art Blocks were hardly affected. However, the less popular NFT collections like Moonbirds and PROOF were hit hard due to their exposure to SVB.
According to Sara Gherghelas, a research analyst at DappRadar, Yuga Labs’ success had increased thanks to its investment in CryptoPunks as well as its ability to build a community. She said;
“They have a very clear road map, the team is visible, and they decided to deliver a good project after the Ape ecosystem. They keep building. They are showing that if you're part of their community, they have so many perks and benefits.”
Moonbirds lost 18% of its value following SVB’s collapse as the company announced its exposure to the bank. However, the floor price has recovered a bit, reaching $6,207 (4 ETH). On 11 March, an Ethereum address sold almost 500 Moonbirds NFTs for losses between 9% and 33% (roughly $1.1 million).
Gherghelas added that Proof’s exposure to SVB was just the icing on the cake, as holders were prompted to sell because of the company’s poor performance in recent months.
Proof canceled its Proof of Conference slated for May, leaving the community feeling uncertain about the company’s ability to keep its promises. Gherghelas concluded that;
“People, users and consumers are becoming pickier, and they don't want hype, they want the perks, the benefits and the utility behind that NFT collection.”
The desire to purchase NFTs with benefits and utility remains a major reason why the blue-chip NFTs remain leaders in the space.