The crypto world’s difficulties have affected many aspects and sectors. Not only have digital coins been struggling, but virtual land and Metaverse have also been caught in the crossfire. Last year, something as simple as buying an item inside a metaverse was considered a luxury or status symbol.
However, the hype and excitement around metaverse land have been declining since March of this year. This is due to a combination of falling cryptocurrency prices and slow infrastructure development.
Almost a year ago, Facebook rebranded to Meta, and virtual land prices skyrocketed. But now, 11 months later, trading volume is down more than 80%. Was this just a far-fetched dream? Will the virtual marketplace prices rise again? Is the ecosystem worth investing in?
Metaverse and virtual lands prices are in the red zone
Following the introduction of Meta, interest in the Metaverse increased rapidly, with businesses eager to invest in it. Expectations for an alternative universe where people may live, work, and have fun are starting to take hold. The goal is to build a world that’s comparable to the real one, where individuals may do just about anything they want.
The metaverse concept, however, has entered a period of uncertainty as talk about digital assets has died down. According to reports, the value of non-fungible tokens (NFT) in the custody of the top virtual platform is declining.
Many popular platforms, like Decentraland, The Sandbox, and Somnium Space, have decreased revenue by up to 95%. Ethereum‘s currency, Ether, has also fallen significantly in value, contributing to the decline of metaverse lands. As the average land sale decreases, virtual lands appear to be in less demand.
Since the crypto winter struck, Sandbox’s revenue per unit has been declining on a monthly basis. The Sandbox’s current value, according to CoinMarketCap, is $0.867844.
The past twelve months have been difficult for sellers because the value of Ether against the dollar has dropped significantly. This means that virtual lands are now worth less in dollars. However, it is not just the value of Ether that has dropped—the sales of NFTs on three leading metaverse platforms have also decreased.
WeMeta, a metaverse analysis site, has found that the average virtual land price has decreased by over 80 percent since November 2021. The trade volume of virtual properties has also dropped by more than 90 percent during this time.
Recently, the Web3 ecosystem has experienced a land rush, resulting in many individual investors incurring significant losses. At present, it is difficult for crypto investors to justify investing in the Metaverse. The markets are not only risky and volatile but they are also undervalued.
Crypto Projects and global brands continue to venture into Metaverse
The cryptocurrency crash has reignited the debate about the legality of virtual real estate investments. However, large corporations and well-known crypto projects have taken the opportunity to pounce. The advent of the Metaverse in the eyes of big investors, firms, and service providers is likely to be viewed differently than that of typical users and enthusiasts.
In May, Yuga Labs, the creator of the Bored Ape Yacht Club – a well-known and highly-valued collection of NFTs – launched the highly-anticipated metaverse project, Otherside. Reportedly 200,000 parcels of land were put up for sale.
The launch has turned into a smashing success, establishing Yuga Labs as a rising star on par with the world’s top two metaverse property firms, Decentraland, and The Sandbox. Although Decentraland has been doing well, the value of LANDS and estates sold in the past few months has decreased.
It’s impossible to predict which firm will win in the end. Choosing real estate from millions of parcels is similar to gambling. These variables have prompted the question: Is the metaverse mania about to burst?
However, while most organizations and businesses appear unconcerned by this debate, global companies and institutions seem to be immune to what they term “short-term fluctuations.”
Many retail and electronic brands like Samsung, Nike, and Gucci have been buying virtual property. JP Morgan also announced that it had opened a lounge in Decentraland. This is the first bank to establish a presence in the Metaverse. They predict this could be a huge market opportunity worth $1 trillion annually.
It all boils down to the idea that the Metaverse should be optimized for the long term. It was never designed to provide a quick return. Bumps in the road will be unavoidable in such a huge new area, especially at its beginning when it is still being explored.
Meta is planning for the Metaverse to grow exponentially, and missing out commercially is not an option if Meta’s plans come to fruition. The market value of the Metaverse is projected to be $1.6 billion by 2030, further solidifying this point.
Here are study case examples of the Web3 market performance
Most virtual lands and Metaverse projects are failing. Here is a breakdown of how each one is performing. As seen below, all their prices have been on a downtrend in the last few months.
It’s worth noting that some virtual worlds have begun to recover, with Somnium Space being one great example.
Is it time to give up Web3 marketplaces?
Absolutely NOT!! Just like anything else, market trends come and go. However, if the metaverse grows as expected, having a location within it could be worth much more than what we have seen people pay for plots of land. Of course, there are many variables to be considered.
It’s difficult to predict whether Decentraland and Sandbox will retain their dominance in the future. Metaverse worlds may rise and fall depending on their usefulness and popularity in the years ahead.
If one believes in the metaverse, a modest market downturn is but a minor impediment owing to dire global circumstances. The economy will fluctuate, but the new, immersive internet 3.0 will continue to exist thanks to its massive scale.