Silicon Valley Bank (SVB), the state-charted commercial bank, collapsed, followed by a bank run. This bank was considered the foundation of several global startups and venture capital funds. On March 2023, SVB collapsed due to the bets on bonds. This collapse points to another significant setback for the tech industry. Looking for a safe cryptocurrency trading platform to invest in Bitcoin? Then have a look at https://immediateconnect.me
In this article, we shall closely analyze the effect of SVB on NFT space. So, let’s begin!
SVB Crises – The Biggest Economic Failure
The failure of Silicon Valley Bank is the most extensive since the 2008 financial crisis. On the one hand, the crypto market has been reprieved from its downfall. On the other hand, NFT (non-fungible token) is facing a drop in its volume. Now, the question is how the NFT traders and investors realize the adverse effect of the SVB’s collapse. Well, let’s read this further.
NFT Traders Seem Dull About SVB’s Collapse
Last month, the SVB collapsed because of lower value interest on bets on bonds. As the interest rates continue to rise, the commercial bank continues to fall. Henceforth, the bank’s venture capital clients withdrew their deposits from the bank. The entire scenario resulted in an adverse situation, with the bank selling off assets at losses.
Eying this hubbub, DappRadar presented a report. The report shows how the collapse of Silicon Valley Bank (SVB) originated a notable drop in the total count of active non-fungible token (NFT) traders. The latest edition of the DappRadar report speaks of NFT traders seeming dull about the commercial banking commotion in the U.S.
NFT Market Amidst Banking Disorder
The NFT industry did very well in its approach at the beginning of 2023. It was notes 23rd January as the recovery for the market. Also, this day the NFTs was adopted by the peoples. As a result, it was observed that the sales made that same day NFTs were absolutely much in amount. Hence, from here the NFT market showed its growth.
But what happened then? The revaluation of USDG and SVB collapsed a day. This made the NFT market reduce down again. For those who don’t know what’s USDC, it is a cryptocurrency called one of the largest stablecoins.
Right from March 2023, the NFT trading volume suffered a set down of 51%. So due to the decrease in volume of trading the sales count reduced too much. On an average it was estimated that 16 percent of sales count falls down. The ranker of decentralized application named Dapp Radar announced that the traders of NFT will become passive someday. Hence, this made one to doubt the stability of such stablecoins.
It was estimated that there are around 12000 NFT traders on march 2011. Since 2011, this never happened anytime. In the opinion of the data aggregation platform, credit goes to the NFT marketplace Blur which defeated OpenSea (the first and largest NFT marketplace) in monthly volume for the third month.
SVB Bank’s Collapse Downbeats NFT Trading Volume
As discussed above, the collapsed happned between SVB and USDC made the trading volumes of NFT reduced too much. Today, non-fungible token traders are desperate to hold onto their assets. Why? Because of the banking crisis prevailing in the United States.
Before this banking crisis, NFT trading volumes increased from $68 million to $74 million. On March 10, with the collapse of SVB, the trading volume declined. Hence, the volume of trading reached around 36 million dollar on March 12. Furthermore, a drop is seen in the daily NFT sales count. From March 9 to March 11, the NFT sales count dropped by 27.9%.
Blue-Chip NFTs Remain Silent
Blue-Chip NFTs are projects predicted to gain stability in terms of value and profitability. These top-tier NFTs remained unaffected throughout the collapse of SVB. Bored Ape Yacht Club and CryptoPunks – two of the NFTs built on Blockchain – witnessed negligible changes in the floor prices.
On March 11, there was a minor sink of Blue-Chip NFTs below $100,000. However, the figures turned the corner very soon. Moreover, it’s notable that other blue-chip collections, like Azuki and Art Blocks, remained intact throughout the SVB scenario.
So, now you know all about how SVB dragged down NFT Trading volume. You also learned that Blue-Chip NFTs remained unharmed. If you want to be active on blue-chip NFTs, visit Bitcoin Smart official website for trading.