The metaverse has become increasingly popular in recent months, but the trend has recently reversed, with catastrophic consequences for the ecosystem.
There has been talk of the winter of cryptocurrencies, in particular due to its catastrophic influence on the price of cryptocurrencies. The NFTs and the metaverse seemed, at first, untouched by the crisis. However, the lack of interest has not failed to hit the market for non-fungible tokens, while that of virtual worlds has been gray for a few days.
Having become the new playground for brands, the metaverse was the scene of great speculation for three years. Investors buy virtual land there before reselling it a few weeks later. Strong demand has allowed prices to rise exponentially. According to a report by Chainalysis, the cost of virtual real estate increased by 879% between September 2019 and March 2022.
However, the phenomenon is coming to an end. While the price of a package could be around $ 15,000 in early 2022, it would currently only be worth a few thousand. A trend totally in opposition to the ascending curves of last autumn. The fall is steep, with an overall decline of 66% according to The Information. However, it could be that the numbers are actually higher, as the depreciation is continuous.
The phenomenon can be explained in several ways. First of all, from the cryptocurrency crisis, which allowed some lands to be devalued. Faced with the severity of the fall in digital currencies, users may have moved away from virtual real estate to track their precious coins.
Second, the bursting of the speculative bubble appears to be the main reason. The strong buying pressure followed by the market’s inability to keep up would have led to massive resale of land. Such an event is not unknown to the crypto sphere, as it occurs every four years over the course of Bitcoin.
Towards Better Virtual Real Estate?
The plots in the metaverse are facing an obvious disinterest. This usually occurs when investors are no longer able to generate profits. This is without taking into account the influence of businessmen such as Mark Cuban, who considers virtual real estate to be unattractive. In fact, it has no use in the real world and is simply used to speculate.
However, this metaverse crisis could do the cryptocurrency industry a disservice. Indeed, the lack of profit could purge users. Investors attracted only by profits cause the subsequent creation of speculative bubbles. The latter prevent the development of technologies since their explosion triggers real crises that sometimes require starting from scratch.
The great greedy may soon have to look elsewhere as the metaverse no longer brings money. However, they may return once the situation has stabilized. Likewise, we are not immune from a rental crisis within virtual worlds.
The real estate crisis will in any case have the merit of passing a trend considered harmful for many, also stopped by the crypto winter. Devoid of speculators, the metaverse may be able to offer land at a stable price and on which companies and individuals can build at their leisure. However, the public will have to agree to return to virtual worlds after this bad publicity.
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