Three recent bank failures have impacted the NFT market. These banks include Signature Bank, Silvergate and Silicon Valley Bank. The event was due to stringent regulations, a downtrend in the economy, a liquidity crisis and a failure to meet customer withdrawal requests.
Following the recent collapse of digital bank Silicon Valley Bank (SVB), DappRadar reported a significant drop in non-fungible token (NFT) trading volumes.
Impact of SVB collapse on NFT trading volume
According to data aggregation platform DappRadar, the collapse of SVB has sent shockwaves through the cryptocurrency industry as investors have begun to reassess their risk exposure to various digital assets. The incident dropped the total number of non-fungible token traders to around 11,440, the lowest since November 2021.
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of report According to DappRadar, NFT trading volumes fluctuated between $68 million and $74 million before the Silicon Valley Bank collapse on March 10. The decrease in trading volume was a 27.9% decrease in his daily turnover of non-fungible tokens recorded between March 9 and 11, 2023.
Until now, Silicon Valley Bank was seen as a major player in the non-fungible token market, providing critical financial infrastructure and investment capital for various projects. Due to the sudden collapse, many NFT projects are currently struggling to secure funding and liquidity, which is the main reason for the decline in trading volume.
The report also highlights the impact of the broader crypto market downturn, with major assets such as Bitcoin and Ethereum losing significant value in recent weeks.
The event may have prompted many investors to shift their focus from riskier assets like NFTs to more stable assets such as gold and government-backed currencies.
The report added that traders’ attention turned away from the non-fungible token market as it dropped to $0.88 in response to the USD Coin token’s de-pegging.
The market value of good chips remains the same
Declining NFT trading volume did not affect the value of good non-fungible tokens. Despite the recent decline in NFT trading volume, the value of quality NFTs remains unaffected based on Market Watch.
Good NFTs are high-end digital assets that maintain their value even when the overall NFT market is down. Total NFT trading volume dropped to $36 million, but blue-chip stocks such as CryptoPunks and Bored Apes Yacht Club (BAYC) held their value despite a slight drop in price.
according to According to Yuga Labs co-founder Greg Solano, the company’s financials aren’t overly exposed to Silicon Valley banks. This may be the reason why these good non-fungible tokens are not affected by the decline in trading volume in the broader non-fungible token market.
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Apart from this, good non-fungible tokens offer a unique opportunity for creators and artists to monetize their work in the digital age, creating new revenue streams at a time when technological advances have disrupted traditional revenue streams. Generate a revenue stream.
According to a DappRadar report, the impact of Silicon Valley Bank and Signature Bank is having a dramatic impact on the cryptocurrency industry, especially the decentralized application ecosystem. These events have increased the need for the digital currency space to become less dependent on regular banking infrastructure and more self-sufficient.
Featured image on Pixabay and chart on Tradingview.com