After a volatile 2022, during which non-fungible token art projects saw a 97% loss in trading volume, the industry has been on an upward trajectory this year. The recent collapse of several US banks, including Silicon Valley Bank, has had some impact on blue chip NFT projects like Bored App Yacht Club and Cryptopunks, according to a March 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, holding their value despite market turbulence. This is especially true for collections like CryptoPunks, which have been identified as securities and assets in their own right,” DappRadar analyst Sara Gherghelas told MarketWatch in an email. “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 growing recognition by consumers of the value and utility of NFT collections.” The floor price is the price of the cheapest art in the collection. Digital asset investments, long viewed as risky assets, have performed particularly well since the collapse of crypto exchange FTX in November 2022, and the collapse of crypto-friendly Signature and Silvergate banks. Bitcoin BTCUSD, +2.10% saw its best three-day performance since October 2019 earlier this week. Bitcoin investors have long touted it as an alternative to traditional financial institutions, including banks. “It is clear that the NFT market has a low correlation with the capital and crypto markets,” said Pedro Herrera, head of research at DappRadar. “They remain largely unaffected because blue-chips have become the standard of this new market, and as such, they create their own externalities. That’s how art works in economic crises. On the other hand, it’s also important to note that The teams behind the blue-chips continue to be leading Web3 brands exposed to other types of systemic threats.” But not all digital assets are doing well. NFT trading volume has fallen more broadly by 51% since the start of March, with the number of sales down 15.88%. With volatility in stablecoins, NFT traders have become less active, with Saturday the lowest since November 2021. Traders were seen and the lowest one-day count in 2023.
