March 20, 2023

NFT Trading Volume Declined Following SVB Collapse

NFT Trading Volume Declined Following SVB Collapse Featured Image

Following the collapse of the Silicon Valley Bank (SVB) and being shut down by the California Department of Financial Protection and Innovation earlier this month, the banking industry witnessed a systematic crisis, which also affected the NFT industry.

According to a recent report by Dappradar, the NFT trading volume has declined by 51% from the beginning of the month, with the sales count going down by 15.88%, despite the industry took an upwards trajectory most of 2023. For example, Saturday, March 12, witnessed the least traders (12,000) since November 2021.

In spite of the shrinking NFT trader activity and the overall decline in the NFT industry, the floor prices of the top-tier NFT collections were not badly affected, including BAYC and CryptoPunks, whose floor prices recovered quickly after a slight dip. Moonbirds and the PROOF ecosystem were hit hard due to their exposure to the collapsed bank, but Moonbirds recovered a little bit.

The Decentralized Finance (DeFi) sector was also affected as the DeFi market witnessed a decrease in the total value of all assets locked into DeFi protocols (TVL), dropping from $79.28 billion to $71.61 billion in one day. But in the following days, TVL spiked again by 13% reaching $81.15 billion.

As for the cryptocurrencies, Bitcoin achieved tremendous gains over the past few days, it was traded at more than $27,000 at the time of writing. This is an increase of over 35 percent since March 10 when Silicon Valley Bank (SVB) was shut down and Ethereum as well.

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