With the failure of Silicon Valley Bank (SVB) last week, trading volumes for nonfungible tokens (NFTs) drastically decreased as investors fled the markets out of concern for the effects of a significant US bank failing. Data aggregation platform DappRadar reported on March 16 that NFT trading volumes were between $68 million and $74 million before to the collapse of SVB on March 10, then decreased to $36 million on March 12.
From March 9 and March 11, the daily NFT sales figure fell by 27.9%, contributing to the decline. 11,440 NFT traders were “active” on March 11 as well, according to DappRadar, the fewest since November 2021.
According to the report, traders turned their focus away from the NFT market as a result of the depeg of USD Coin $1.00, which fell as low as $0.88: “NFT traders became less active” as a result, according to Dappradar. Notwithstanding the trading gloom, the market value of “blue chip” NFTs remained unaffected significantly, with just a modest decline in the floor prices of collections like the Bored Apes Yacht Club (BAYC) and CryptoPunks.
The speed of the recuperation demonstrated the toughness of these premium NFTs, according to DappRadar. In a market that has been disrupted, “Blue-Chip NFTs remain a reliable investment.”
According to co-founder Greg Solano, Yuga Labs, the company that created the collections, confirmed that it only had a “extremely limited exposure” to SVB, which may be the cause of the stable floor pricing of the BAYC and CryptoPunks.
Nevertheless, after learning that PROOF, the group behind the NFTs, had a major exposure to SVB, the floor price of the Moonbirds collection dropped noticeably 35.3% from 6.18 ETH to 4 ETH on OpenSea.