Three cases of bank collapse have recently occurred and impacted the NFT market. These banks include Signature Bank, Silvergate, and Silicon Valley Bank. This event resulted from strict regulations, an economic downtrend, a liquidity crunch, and failure to meet customers’ withdrawal requests.

Following the recent collapse of the digital bank Silicon Valley Bank (SVB), DappRadar reported a significant drop in trading volumes for non-fungible tokens (NFTs).

SVB Collapse Impact On NFT Trading Volumes

According to the data aggregation platform, DappRadar, the SVB collapse has sent shock waves throughout the cryptocurrency industry as investors begin to reassess their risk exposure to various digital assets. The incident brought the total number of non-fungible tokens traders to its lowest value since November 2021, dropping to around 11,440.

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The report from DappRadar stated that the trading volumes of NFT were fluctuating between $68 million and $74 million before the fallout of Silicon Valley Bank on March 10. As of March 12, the figure declined to $36 million. The decline in trading volumes was a 27.9% dip in the daily sales of non-fungible tokens, recorded between March 9 and 11, 2023.

Before now, Silicon Valley Bank was seen as a key player in the non-fungible tokens market, providing critical financial infrastructure and investment capital for various projects. With its sudden collapse, many NFT projects now struggle to secure funding and liquidity, which is the main reason behind the drop in trading volumes.

The report also highlighted the impact of the broader cryptocurrency market downturn, which has seen major assets like Bitcoin and Ethereum lose significant value in recent weeks.

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Author: Savannah Fortis

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