The metaverse has become increasingly popular in recent months, but the trend has recently reversed, with catastrophic consequences for the ecosystem.
The crypto winter has been talked about, in particular because of its catastrophic impact on the price of cryptocurrencies. NFTs and the metaverse initially seemed unaffected by the crisis. However, disinterest has not left the market for non-fungible tokens, while the one for virtual worlds has been gray for a few days now.
The metaverse has become the new playground for brands and has been the scene of great speculation for three years now. Investors buy virtual land there before reselling it a few weeks later. Due to strong demand, prices have risen exponentially. According to a report from Chainalysis, virtual real estate costs increased by 879% between September 2019 and March 2022.
However, the phenomenon is coming to an end. While the price of a pack could be around $15,000 in early 2022, it would currently be worth only a few thousand. A trend that completely contradicts the rising curves of last fall. The decline is steep, with an overall decline of 66% according to The Information. However, the numbers may actually be higher because the depreciation is continuous.
The phenomenon can be explained in several ways. First of all, due to the cryptocurrency crisis, which made it possible to write off certain lands. Faced with the gravity of the digital currency fall, users may have turned away from virtual real estate to control their precious coins.
Second, the bursting of the speculative bubble seems to be the main reason. Strong buying pressure followed by the market’s inability to keep up would have led to massive land resale. Such an event is not unknown in the crypto sphere as it occurs every four years over the course of Bitcoin.
Towards better virtual real estate?
Plots in the metaverse face obvious disinterest. This usually happens when investors can no longer generate profits. This without taking into account the influence of business people like Mark Cuban, who finds virtual real estate uninteresting. Indeed, it is of no use in the real world and is simply used for speculation.
However, this crisis in the metaverse could be doing the crypto sector a disservice. Indeed, the lack of profit could purge users. Investors attracted only by profit cause the successive creation of speculative bubbles. The latter hinder the development of technologies, as their explosion causes real crises that sometimes have to be restarted.
The big greedy may have to look elsewhere soon, as the metaverse is no longer making them money. However, they may return once the situation stabilizes. Likewise, we are not immune to a rental crisis within virtual worlds.
The real estate crisis will nevertheless have the merit of pushing through a trend that many consider harmful, also halted by the crypto winter. Devoid of speculators, the metaverse may be able to offer land at a stable price and upon which companies and individuals can build as they please. However, the public will have to agree to return to virtual worlds after this bad publicity.
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