NFT Volume Drops Sharply Following Collapse Of Silicon Valley Bank
Following the California Department of Financial Protection and Innovation’s shutdown of Silicon Valley Bank earlier this month, startups remain uneasy about their future. Likewise, the non-fungible token (NFT) space is struggling to make sense of the banking crisis.
According to a report by DappRadar on Thursday, NFT trading volume has dropped by 51% since the beginning of March. The sales count has also taken a hit, falling by nearly 16%.
Trading volume refers to the total value of transactions that occur in the market. NFTs are unique digital assets that are recorded on a blockchain, and can include things like digital art, collectibles, and virtual real estate.
The trading volume is typically measured in a particular currency, such as US dollars or Ethereum, since many NFTs are traded on the Ethereum blockchain. The volume can fluctuate widely based on a variety of factors, including the popularity of particular NFTs, changes in market conditions, and shifts in investor sentiment.
NFT trading volume is often seen as an indicator of the overall health and growth of the NFT market, as well as a gauge of investor interest and activity. As the market for NFTs continues to evolve and mature, it’s likely that trading volume will continue to be an important metric for understanding trends and identifying opportunities for growth and investment.
A Temporarily Less Active Marketplace?
Traders are additionally becoming less active, as market participants increasingly question the stability of stablecoins. On March 11, the day after the Federal Deposit Insurance Corp. took control of Silicon Valley Bank, the number of traders was at approximately 12,000, a figure not seen since November 2021. Single NFT trades totaled 33,112 that day — the lowest daily tally in 2023.
Shortly after news of SVB’s collapse, Proof, the collective behind the popular collection Moonbirds, shared that the company had some funds invested in the bank. Moonbirds lost about 18% of its value over the weekend.
DappRadar also noted that several top-tier NFTs have remained strong throughout the latest fiscal fiasco. Floor prices of blue-chip NFT issuer Yuga Labs, including those of Bored Ape Yacht Club (BAYC) and CryptoPunks, slightly dipped. Following a minor dip below $100,000 on March 11, the NFTs recovered quickly.
This article was originally published on Benzinga and appears here with permission.