As traders fled the markets in fear of the implications of a major United States bank failing, the trading volumes of nonfungible tokens (NFT) suffered a massive pounding following the failure of Silicon Valley Bank (SVB) last week.
According to a report published on March 16 by the data aggregation platform DappRadar, the amount of trade in non-fungible tokens (NFTs) was between $68 million and $74 million in the days leading up to the collapse of SVB on March 10, but it dropped to $36 million the next day.
According to DappRadar, there were 11,440 NFT traders “active” on March 11 as well. This was the lowest amount observed since November 2021. The research elaborated on why trader attention was diverted away from the NFT market after the depeg of USD Coin (USDC), which reached a low of $0.88:
Dappradar noted that as a consequence of this, “NFT traders became less active.” The market value of “blue chip” NFTs was not considerably influenced by the trading chills, with the floor prices of collections such as the Bored Apes Yacht Club (BAYC) and CryptoPunks just modestly decreasing. This was despite the fact that trading chills occurred.
According to DappRadar, “the recovery was swift, illustrating the resilience of these top-tier NFTs.” [Citation needed] “Blue-Chip NFTs continue to be a stable investment in an industry that is being disrupted.”
According to Greg Solano, the co-founder of Yuga Labs, the company that is behind the BAYC and CryptoPunks collections, the company has confirmed that it only has a “extremely limited exposure” to SVB. This may be the reason why the floor pricing of these collections have remained stable.
However, following the discovery that PROOF, the team behind the NFTs, had major exposure to SVB, the floor price of the Moonbirds collection on OpenSea dropped by a massive 35.3%, from 6.18 ETH to 4 ETH. The price of the collection had previously been at 6.18 ETH.
According to DappRadar’s analysis, this was caused in part by the sale of nearly 500 Moonbirds NFTs by an Ethereum address for losses ranging from 9% to 33%.A loss of 700 Ether was incurred as a total from the trades that took place on the NFT marketplace Blur (ETH).