After a shaky 2022, during which non-fungible token art projects saw a 97% loss in trading volume, the industry has been on an upwards trajectory this year. The recent collapse of several U.S. banks, including Silicon Valley Bank, has had little effect on blue chip NFT projects like the Bored Ape Yacht Club and CryptoPunks, according to a Mar. 16 report by DappRadar, which tracks and analyzes decentralized applications.
“During the recent financial banking crisis, blue chip collections have proven to be a valuable asset class, maintaining their value despite market turbulence. This is particularly true for collections such as CryptoPunks, which have been recognized as securities and assets in their own right,” said Sara Gherghelas, an analyst at DappRadar, in an email to MarketWatch.
“Over the past six months, the floor price of CryptoPunks has remained stable, comparable to the stability of stablecoins. The maturing NFT market has also contributed to the increasing recognition of the value and utility of NFT collections by consumers.”
The floor price is the price of the cheapest piece of art in a collection.
Digital asset investments, which have long been viewed as a risky asset, especially after the collapse of crypto exchange FTX in November 2022, have performed well after the collapse of Silicon Valley Bank, and the fall of crypto-friendly Signature and Silvergate Banks. Bitcoin BTCUSD,
“It’s clear that the NFT market is lowly correlated to capital and crypto markets,” said Pedro Herrera, Head of Research at DappRadar. “They remain mostly unaffected because blue-chips have become the standard of this nascent market, and as such, they create their own externalities. In similar way that art acts in economic crisis. On the other hand, It is also important to note that the teams behind blue-chips are becoming leading web3 brands, that are exposed to other type of systemic risks.”
But not all digital assets are doing well. NFT trading volume more broadly has decreased by 51% since the beginning of March, with sales count declining by 15.88%. With volatility in stablecoins, NFT traders have become less active, with Saturday seeing the least traders since November 2021, and the lowest single day count in 2023.