Silicon Valley Bank (SVB) was the backbone of many startups and venture capital funds around the world. Its collapse signifies the biggest banking failure since the 2008 financial crisis. While the crypto market has largely been spared from an adverse effect, the same cannot be said for the non-fungible token (NFT) space.
According to the latest edition of the DappRadar report, the NFT traders went “numb” in response to the banking turmoil in the United States.
NFT Space Amidst Banking Chaos
The NFT industry followed a steady upward trajectory for most of 2023. In fact, the sales recorded highs as the broader market recovered while mainstream adoption of NFTs also saw a spike. However, the collapse of SVB and the de-pegging of one of the largest stablecoins – USDC – was felt in the NFT market.
Since the beginning of March, the NFT trading volume dropped by 51%. The sales count also took a hit, falling by nearly 16%. DappRadar said NFT traders are becoming less active as market participants questioned the stability of the stablecoins. The number of such traders on March 11th was recorded to be 12,000, a level not seen since November 2021. This was accompanied by the lowest single-day trade count in 2023 – 33,112.
Despite the low NFT trader activity, the data aggregation platform stated that the volume was not affected in the same ratio. This could be attributed to the NFT marketplace Blur which bested the once-largest NFT marketplace OpenSea in terms of monthly volume for the third month in a row.
Blue-Chip NFTs Unaffected
The top-tier NFTs remained resilient throughout the event. The floor prices of blue-chip NFTs, including Bored Ape Yacht Club (BAYC) and CryptoPunks, were hardly affected. After a minor dip below $100,000 on March 11th, the figures recovered quickly.
While other blue-chip collections, such as Azuki and Art Blocks, were also not harmed. On the other hand, Moonbirds and the Proof ecosystem were hit hard due to their exposure to the Silicon Valley Bank. Proof had earlier said that the potential loss arising wouldn’t affect the security of the customer’s assets or the project’s roadmap.
But Moonbirds lost 18% of its value since the news unfolded. The floor price has since recovered, climbing to $6,207 (nearly 4 ETH).
Meanwhile, Yuga Labs revealed the “super limited exposure” to the collapsed bank, meaning that the project’s finances will not be significantly impacted by the fallout.