First Mover Asia: For the metaverse to be a $13,000,000 opportunity, a lot of things have to change; Bitcoin price exceeds $31,000

Citi’s report makes bold predictions, but major Metaverse platforms struggle to attract engaged users; Altcoins mixed.

good morning. Here’s what happens:

Price: Bitcoin’s late surge to over $31,000 started the week.

Insights: Citi’s report puts the potential value of the metaverse at $13 trillion, but platforms are struggling to attract engaged users.

Technical opinion: The price rebound was short-lived, indicating a loss of buying power.

price

Bitcoin (BTC): $31285 – 0.07%

Ether (ETH): $1,828 – 1.5%

Biggest Winners

Energetic remote printer back DACs sector
chain link Link + 9.1% Informatics
Gimbal ADA + 1.2% smart contract platform
XRP XRP + 0.8% Currency

Biggest loser

Energetic remote printer back DACs sector
internet computer PCI −8.7% Informatics
Solana floor −7.4% smart contract platform
Ethereum Classic etc. −4.0% smart contract platform

Bitcoin Delayed to Return to Over $31,000

Bitcoin bounced back above the $31,000 threshold on Tuesday after introducing a federal cryptocurrency bill that would address a number of major regulatory issues that have plagued the industry. Ether and other major digital assets also rose in the afternoon, regaining ground lost earlier in the week.

The largest cryptocurrency by market capitalization has been trading above $31,200 almost flat over the past 24 hours, but has risen significantly from its temporary position below $29,300 on US exchanges early Tuesday morning. Bitcoin fell late Monday and continued to trade in a volatile range amid widespread investor concerns about inflation, geopolitical turmoil and the global economy.

Ether, the second largest cryptocurrency, recently dropped more than 1%, trading above the $1800 level. Other major altcoins mixed with SOL over 7% but LINK up over 8%. Sentiment remained bearish.

“Markets continue in a long-term downtrend, but the recent favorable crypto bill in the US provides near-term support as it suggests pressure on the big cryptocurrency unfortunately. [Securities and Exchange Commission] In terms of jurisdiction over cryptocurrencies,” James Key, CEO of Web Protocol 3 Autonomy Network, told CoinDesk.

Stock markets, which have been rocking up and down in recent days as investors digested some bullish trading in addition to the recent bad news regime, rose on Tuesday with the Nasdaq, S&P 500 and Dow Jones Industrial Average up more than half a percentage point. .

However, investors had cause for concern on Tuesday. The World Bank cut its forecast for world economic growth for 2022 to 2.9%, down from 4.1% in January. World Bank Group President David Malpass described the “risks” of stagflation as “substantial”. Later in the day, US Treasury Secretary Janet Yellen told the Senate Finance Committee that she expected inflation to remain elevated. Less than three weeks after reporting disappointing first-quarter results, Target warned investors that its earnings would fall sharply due to changing consumer behavior that created imbalances in its inventory.

Many analysts expect the crypto bear market to intensify in the near future, with Key noting that Bitcoin’s previous bear cycles have bottomed after falling 85% in value over at least 18 months. The current market has lost nearly 60% of its value since hitting an all-time high last November.

“I really doubt this is the bottom,” Key said. Moreover, these previous cycles have all been in a long-term bull market for stocks, while this is not true for the first time. When institutional investors reduce risk, “exotic” and risky assets like cryptocurrencies are the first to sell, indicating that this time around is likely to be an even worse bear market. »

markets

Standard & Poor’s 500: 4160 + 0.9%

DJIA: 33,180 0.8%

Nasdaq: 12175%

Gold: 1851 USD + 0.6%

knowledge

The metaverse struggles to attract engaged users

A recent report by Citi calculated the total addressable market value of the metaverse at $13 trillion.

If it materializes, it would be an impressive feat given that the gaming market is only $180 billion, according to gaming research house NewZoo, and the PC game hardware market is just $5.7 billion.

For the most part, the Metaverse market is just an understated version of the game market. Metaverse exchange-traded funds (ETFs), with their exposure to publicly traded cryptocurrency companies, have lagged behind their market peers – despite mostly being the same.

Citi says the $13 trillion figure comes from all “internet-related revenue to that of displaced physical world activities”. This leads to huge assumptions about the future of e-commerce, as it suggests that all parts of the e-commerce stack will be disrupted by the metaverse.

This roughly parallels the bullish augmented reality (AR) mindset of the late 2010s. Mobile-centric was poised to disrupt many parts of the internet economy, from gaming to advertising.

But the AR space failed to generate useful monocytes. Blippar, a promising London-based startup that merged artificial intelligence (AI) and AR, went bankrupt in late 2018 after raising $37 million at a $1 billion valuation.

The app promised to revolutionize e-commerce by allowing users to point their phone at anything and get any information the app could gather from visual recognition and online searches. It can also be used to provide enhanced 3D visualizations of products that improve online selling opportunities for retailers. They were all interesting and promising new revenue models, but the user base never materialized.

Aside from Blippar, Magic Leap, which released promising initial images it was never able to deliver, has taken life out of the capital markets for augmented reality capital markets, depriving many augmented reality startups of their means to create that promised augmented reality. Despite the success of Pokemon Go, there has been no other unicorn like this augmented reality.

Going back to the predictions of the Citi metaverse, just like the bull market around AR in the late 2010s, something is missing: the users. Data on the series shows that despite the high ratings, the major metaverses are struggling to build a user base, with only a few thousand at most compared to the tens of millions of players playing simultaneously on Steam or Xbox. Live.

And that’s not because they’re new platforms: the PC gaming network Steam reached 1.5 million concurrent users six years after its launch; Decentraland currently has less than 1,200 active users and has been open to the public for two and a half years.

We still have a long way to go before the metaverse becomes a $13 trillion opportunity.

Technical opinion

Bitcoin daily chart showing support/resistance. (Damanic Dantes/CoinDesk, TradingView)

Bitcoin (BTC) remains in a choppy trading range as short-term indicators are neutral. The cryptocurrency could find support at $25,000 and $27,000 as its price continues to stabilize from last month’s sell-off.

BTC is down 4% in the last 24 hours.

The Relative Strength Index (RSI) on the daily chart has fallen below the neutral 50 mark, indicating weak momentum behind the recent price rally above $30,000. On the weekly chart, the RSI is the most oversold since March 2020, which preceded the rally in cryptocurrency prices.

With that said, indicators may remain in the oversold territory for several weeks, especially in a downward price direction. This means that the upside may be limited for BTC, with immediate resistance at the 50-day moving average at $33,371.

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