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 on that day, the lowest daily tally so far this year.
Since the beginning of March, NFT trading volume has fallen 51%, with sales declining about 16%, DappRadar says.
Not all collections of non-fungible tokens, however, were affected in the same way. Projects from NFT issuer Yuga Labs, including Bored Ape Yacht Club and CryptoPunks, saw their floor prices dip slightly on Saturday, but the prices quickly recovered. One Twitter user compared CryptoPunks to USDC, claiming it was more stable than the stablecoin, which lost its peg to the U.S. dollar after Silicon Valley Bank's collapse. The bank failed after it sold a large portion of its holdings at a loss to meet a deluge of customer withdrawal requests.
Sara Gherghelas, a research analyst at DappRadar, said that Yuga Labs’ success has been amplified by its investment in CryptoPunks as well as by its ability to build a community. Although the company said it had limited exposure to Silicon Valley Bank, its token holders didn't make major moves on the news.
“They have a very clear road map, the team is visible, and they decided to deliver a good project after the Ape ecosystem,” Gherghelas said. “They keep building. They are showing that if you're part of their community, they have so many perks and benefits.”
Not all collections made it through the collapse of Silicon Valley Bank unscathed. Shortly after the news broke on March 10, Proof, the NFT collective behind the popular collection Moonbirds, took to Twitter to share that the company had some funds invested in Silicon Valley Bank, sparking uncertainty among holders.
Over the weekend, Moonbirds lost about 18% of its value, according to DappRadar. One large holder sold 500 Moonbirds on Saturday, incurring losses 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 contributed to uncertainty in the project, holders were prompted to sell because of the company’s shortcomings in recent months. After canceling its Proof of Conference set to take place in May, the community has been left feeling uncertain about the company’s ability to keep its promises.
“People, users and consumers are becoming pickier and they don't want hype, they want the perks, the benefits and the utility behind that NFT collection,” Gherghelas said.
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