DappRadar, a leading analytics platform for decentralized applications, has released a report showing a decline in Non-Fungible Token (NFT) trading following the recent NFT market crash triggered by Sotheby’s cancellation of a $13.9 million auction. The report reveals significant drops in NFT trading volume and daily active unique wallets on some of the largest NFT marketplaces including OpenSea, Rarible, and SuperRare. The data suggests that the recent market downturn has caused a temporary slowdown in the NFT market, but experts predict that the industry will recover and continue to grow in the long term. As a result, investors and collectors are advised to exercise caution and conduct proper due diligence before taking part in the NFT market.
Recently, the collapse of banks such as Signature Bank, Silvergate, and Silicon Valley Bank has affected the non-fungible token (NFT) market. This is due to various factors including strict regulations, an economic downturn, liquidity shortages, and failure to meet customer withdrawal demands. The collapse of digital bank, Silicon Valley Bank, has caused a significant reduction in NFT trading volumes according to data aggregation platform, DappRadar. The incident has caused the total number of non-fungible token traders to decline to around 11,440, the lowest value since November 2021. Prior to the banking fallout, the trading volumes of NFT were fluctuating between $68 million and $74 million. However, the figure has declined to $36 million following the SVB collapse which equals a 27.9% decrease in daily sales for non-fungible tokens from March 9th to March 11th, 2023. Silicon Valley Bank had previously been a notable player in the NFT market, providing financial infrastructure and investment capital. Consequently, the collapse has led to a struggle for funding and liquidity for various non-fungible tokens projects, which explains the reduction in trading volumes. Additionally, the broader cryptocurrency market downturn has also negatively affected NFT trading. The decline in NFT trading volumes has not impacted the value of blue-chip NFTs, which are high-value digital assets that have maintained their value despite the overall drop in the NFT market. Despite the slight decline in their prices, blue-chip NFTs, including CryptoPunks and Bored Apes Yacht Club, have remained unaffected. Blue-chip NFTs present a unique revenue opportunity for artists and creators in the digital age. The collapse of banks such as Silicon Valley Bank and Signature Bank highlights the need for the digital currency space to rely less on regular banking infrastructure and become more self-reliant.