Trading volumes for non-fungible tokens (NFTs) took a huge hit after the collapse of Silicon Valley Bank last week. The movement occurred when investors, the vast majority, fled the markets fearing the repercussions of the closure of a large bank in the United States.
According to a report released on March 16 by data monitoring platform DappRadar, trading volumes for the collectible crypto assets fluctuated between $68 million and $74 million before the SVB collapse on March 10, but have since dropped to US$ $36 million on March 12.
The reduction was accompanied by a 27.9% drop in the total daily number of NFT sales between March 9-11. Only 11,440 NFT traders were “active” on March 11, the lowest number recorded since November 2021, according to DappRadar.
The report highlighted that the devaluation of the stablecoin USDC – which temporarily lost parity with the dollar and dropped to US$ 0.88 – diverted the attention of investors. As a result, “NFT traders have become less active,” explained Dappradar.
Effect on NFT collections
Despite the decline, the market value of “blue chip” NFTs – as the most collected, traded and expensive crypto assets are known – was not affected. Base prices for collections such as Bored Apes Yacht Club (BAYC) and CryptoPunks have only dropped slightly.
“The recovery was swift, showing the resilience of these top-tier NFTs,” said DappRadar. “Blue-Chip NFTs remain a stable investment in a turbulent market.” BAYC’s and CryptoPunks’ stable base prices can be attributed to the team behind the collections. Yuga Labs confirmed it had only “super-limited exposure” to SVB , according to co-founder Greg Solano.
On the other hand, the base price of the Moonbirds collection dropped by 35.3%, from 6.18 ethers to 4 ethers on the OpenSea marketplace, following the news that PROOF – the team behind NFTs – had considerable exposure to SVB. The drop was partially triggered by an Ethereum address that sold nearly 500 Moonbirds NFTs, with losses ranging between 9% and 33%, according to the DappRadar report. Market sales of Blur NFTs amounted to a loss of 700 ethers.
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