SVB Collapse Tanked NFT Trading Volume, DappRadar Report Suggests
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Last Saturday, the day after the Federal Deposit Insurance Corp. took control of Silicon Valley Bank, there were only 12,000 active NFT traders, according to DappRadar, a number not seen since November 2021. Single NFT trades totaled 33,112 that day, the lowest daily count so far this year.
Since the beginning of March, NFT trading volume has fallen by 51%, with a decline of about 16%, says DappRadar.
However, not all collections of non-fungible tokens were affected in the same way. Projects from NFT issuer Yuga Labs, including Bored Ape Yacht Club and CryptoPunks, saw floor prices dip slightly on Saturday, but prices recovered quickly. A Twitter user compared CryptoPunks to USDC, claiming it was more stable than the stablecoin, which lost its link to the US dollar after the collapse of Silicon Valley Bank. The bank failed after it sold a large portion of its holdings at a loss to meet a flood of customer withdrawal requests.
Sara Gherghelas, a research analyst at DappRadar, said Yuga Labs’ success has been boosted by its investment in CryptoPunks as well as its ability to build a community. Although the company said it had limited exposure to Silicon Valley Bank, token holders did not react to the news.
“They have a very clear roadmap, the team is visible, and they decided to deliver a good project after the Ape ecosystem,” Gherghelas said. “They keep building. They show that if you are part of their community, they have so many benefits.”
Not all collections made it through the collapse of Silicon Valley Bank unscathed. Shortly after the news broke on March 10th, Proof, the NFT collective behind the popular compilation Moonbirds, took to Twitter to say that the company had invested some funds in Silicon Valley Bank, which triggered uncertainty among the owners.
Over the weekend, Moonbirds lost roughly 18% of its value, according to DappRadar. One large holder sold 500 Moonbirds on Saturday, incurring losses of between 9% and 33% totaling over 700 ETH, or about $1.1 million.
Gherghelas said that while the news of Proof’s exposure to Silicon Valley Bank added uncertainty to the project, the holders were prompted to sell because of the company’s shortcomings in recent months. After canceling the Proof of Conference scheduled to take place in May, the community has become uncertain about the company’s ability to keep its promises.
“People, users and consumers are becoming more discerning and they don’t want hype, they want the benefits, the benefits and the utility behind that NFT collection,” Gherghelas said.
