LAGOS (CoinChapter.com) — The Metaverse sector grew unprecedently in recent years. But it could have been a bubble, in the end.
Individuals bought virtual artworks. Two craziest events during the frenzy were Beeple selling his artwork for $61 million and former Twitter CEO Jack Dorsey selling his Tweet for $2.9 million. Nonetheless, the excitement around owning digital collectibles has been winding down recently.
Is the “metaverse bubble” bursting?
Dating app Tinder backtracked its Meteverse investment last week due to uncertainty around the sector.
The Meta experiment has not been going as planned because, despite the excitement around the prospect of creating one of the most powerful Metaverse ecosystems, the company has continued to decry the loss of users daily and the failure to meet its revenue target.
Refinitiv estimates that Meta’s third-quarter revenue will be between $26 billion and 28.5 billion, which falls short of the $30.5 billion average analyst estimate. Meta CEO Mark Zuckerberg said the company would focus on reducing headcount growth over the next year.
Troubles in the crypto-meta world
In other news, Metaverse assets, like virtual land sales, have continued to dwindle.
Notably, the average price of virtual land was around $15,000 around February 2022, up from about $2,000 in January 2015. Virtual land sales have seen a sharp decline since February. The average virtual land now sells for almost $4,000, which is a 73% decline in seven months.
The overall trading volume of virtual land sales across the top six platforms has declined from $225 million in December 2021 to less than $10 million.
The total collapse in the prices of virtual assets is caused partly by the decline in the price of crypto assets.
Recall that the multi-billion dollar ecosystem Luna collapsed, which led to the total collapse of the token’s price from $119 to less than 1 cent today. Moreover, the ecosystem’s sporadical effect has sharply declined the price of Bitcoin, Ethereum, and other cryptos.
Investors are currently cautious about investing in crypto, which means less investment in virtual assets.
The decline can also be traced to the current economic downturn worldwide due to the pandemic’s effect and the war between Russia and Ukraine. The prices of commodities like gold and silver usually increase during financial crises, but investors have opted for the commodities they can feel and touch rather than virtual assets.
The decline of virtual assets can also be blamed on the different exploits around the crypto ecosystem; hackers exploited the NFT gaming platform Axie Infinity and stole more than $600 million.
Investors are scared because they can lose millions of dollars worth of virtual assets to hackers. As a result, the fear is causing investors to be extremely cautious about investing in virtual assets.