NFT traders are reeling from the SVB collapse, which has hit the industry hard.
There’s nothing like an unexpected disaster to kill the buzz. Indeed, since the FTX black swan event, we have been dealing with another catastrophic episode courtesy of Silicon Valley Bank (SVB). In fact, March 11 was the worst day of the year for NFT trading volume. There were 11,400 NFT traders on the day, also the lowest since November 2021. Thus, another blow has been dealt to the promising year 2023 for NFT trading.
Why does SVB matter to NFTs?
Simply put, the SVB debacle is distracting traders from NFTs. In addition, the demise of the bank directly affects the crypto industry. As the largest bank for tech startups and Web3 brands, SVB’s downfall caused a chain reaction across the crypto and NFT industry. Additionally, depending on the impact of the SVB collapse, some major NFT brands have been negatively impacted. For example, Moonbirds lost 18% of its value when news broke that according to DappRadar . Moreover, one Ethereum address sold almost 500 Moonbirds NFTs with losses ranging from 9% to 33%.
However, the SVB fiasco is not damaging to the entire NFT industry. Blue chip NFTs such as Bored Ape Yacht Club (BAYC) have proven resilient. For example, on March 11, the price of BAYC and the minimum price fell slightly below $100,000 and quickly recovered. As such, blue chip NFTs such as BAYC and CryptoPunks have proven to be a worthy investment and largely disaster-proof.
Games remain stoic
You can’t hold back the gaming industry. History tells us that playing games is a past time that we will always enjoy, no matter what is happening outside. Also, online gaming seems to be just as reliable during the global financial crisis. For example, over the weekend after the SVB crash, Web3 gamers continued to play as usual. In fact, online gaming activity was 10% higher than the previous weekend. So in the midst of economic uncertainty, Web3 gamers continue to play just like traditional gamers.
In conclusion, we are all reeling from the SVB debacle, and some are feeling it more than others. However, as the numbers show, there is also strength and resilience in the NFT industry.