The metaverse seemed to know no crisis. Following the fall of digital currencies, virtual worlds have continued to attract people, but without keeping their heads above water.
A successful market… or almost
The crypto crash has forced investors to turn to less risky projects, and above all less subject to the vagaries of the economy. Some of them did not have to look far since the metaverse, which at first glance seemed untouched, opened its arms to them. Unfortunately, this was an illusion.
According to a report published by Kraken Intelligence and dating back to the month of May, in the midst of the crypto crash, the tokens linked to the metaverse have shown excellent performance. In all, it is estimated that the latter have benefited from an average increase of nearly 400% in one year.
Looking at 1-year performance, the metaverse sector significantly outperformed the market year-over-year with a return of +389%. This includes assets such as Decentraland (MANA), Sandbox (SAND) and Axie Infinity (AXS). Performance remains positive with the inclusion of projects such as Apecoin (APE) and STEPN (GMT).
Excerpt from report published by Kraken Intelligence
Such a phenomenon could be explained by the constant interest of the crypto community for virtual worlds, which were then quite new. While fashion offered them all its favors, users rushed to buy virtual land and therefore use these famous coins linked to the metaverse. The most greedy were able to speculate on their price at leisure as they did on the course of Bitcoin for example, while finding an audience of buyers.
The NFT market, which has made virtual worlds a veritable marketplace and which still enjoys all its popularity, also plays a role in the phenomenon. As for the various brands, they never stopped showing interest in the metaverse and also continued to flock there.
From a broader perspective, the metaverse has also been able to become an escape for aggrieved investors and the public who, hit hard by news of war and global inflation, have found a breath of fresh air there thanks to to its recreational and virtual side. This has created an entire ecosystem of visitors who have allowed the crypto-metaverse economy to grow and their coins to reach 400% growth in a few months.
Nonetheless, contrary to popular belief, the metaverse was not immune to the crypto crash that mowed down the industry and ended the steady rise in associated tokens. While virtual worlds remain popular and investment continues to flow in today, related tokens have seen their price drop just like any other cryptocurrency.
The metaverse is far from out of the woods. Some investors who have fallen back on its economy as well as that of NFTs to continue to speculate have only reinforced the fragility of its bubble, which could in turn burst at any moment. The more its popularity increases, the more the risks are present.
Unfortunately, for Tony Tran, founder of the Peer company which works on developing technologies for the metaverse, the crypto sphere is not equipped to deal with such an event. On the contrary, virtual worlds would have emerged too early, even before the blockchain had built a solid structure.
Everyone is striving to make blockchain secure, fast, and as decentralized as possible, but we argue that’s not the right problem to solve. It’s like building high-speed highways without any cities! Everything in the blockchain revolves around trading, from tokens to NFTs. But to bring blockchain to the masses, we need to do what the desktop experience did for the command-line UI: we need to hide the complexities of blockchain and expose the possibilities so that normal people can see it. ‘utilize. […] Rather than bringing the physical world into cyberspace, we are beginning to map cyberspace directly onto the physical world.
Extract from a intervention by Tony Tran for Decrypt media
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Metaverse: after the crypto crash, virtual worlds are also on life support – BeinCrypto
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