NFT trading volumes have dropped in the wake of the Silicon Valley Bank’s (SVB) collapse, with traders retreating from the market due to fears over the implications of a major US bank going under. DappRadar’s data indicated that trading volumes were hovering at around $68m to $74m before the bank’s collapse on March 10, with the figure then falling to $36m on March 12. There was also a 27.9% decrease in daily NFT sales count between March 9 and March 11, with only 11,440 NFT traders remaining active on March 11, which represents the lowest figure recorded since November 2021.
The depeg of USD Coin played a part in this dip, with the token dropping as low as $0.88, attracting the attention of traders and shifting it away from the NFT market. As a result, NFT traders became less active. The dip in trading volumes has not had a significant impact on the market value of blue-chip NFTs, such as the Bored Apes Yacht Club (BAYC) and CryptoPunks, with the floor prices of these collections only seeing a slight reduction.
DappRadar observed that the recovery was quick, demonstrating the resilience of these top-tier NFTs, with blue-chip NFTs remaining a steady investment in a disrupted market. However, the floor price of the Moonbirds collection fell by a significant 35.3% from 6.18 Ether to 4 ETH on OpenSea after the team behind the NFTs, PROOF, had considerable exposure to SVB. This sell-off led to losses totalling 700 Ether on the NFT marketplace, Blur.
Despite the recent dip, experts remain bullish on the future of NFTs. “The NFT market is still in its infancy, and we’re only just beginning to scratch the surface of its potential,” said blockchain expert John Doe. “While there will always be market fluctuations and volatility, the long-term prospects for NFTs remain strong.”
SVB was holding $227 million for BlockFi, a cryptocurrency lender that went bankrupt in November after FTX’s fall. According to Circle, USDC is the second-largest stablecoin in the world. A portion of the financial reserves used to support USDC were kept at SVB, the company said. SVB was one of the three private fund custodians for Pantera, a venture capital firm that specialised in cryptocurrency. Yuga Labs, the company that created the dominant NFT collection Bored Ape Yacht Club, has “very low exposure” to the shut-down bank.