The metaverse seems to know no crisis. After the fall of digital currencies, virtual worlds continued to attract people, but without keeping their heads above water.
A successful market … or almost
The collapse of the cryptocurrency has forced investors to turn to projects that are less risky, and above all less vulnerable to the vagaries of the economy. Some of them didn’t even have to look away because the metaverse, which at first glance seemed untouched, opened its arms to them. Unfortunately, this was only an illusion.
According to a report published by Kraken Intelligence dating back to May, in the midst of the cryptocurrency crash, tokens tied to the metaverse have shown excellent performance. Altogether, it is estimated that these have benefited from an average increase of about 400% in one year.
Looking at the one-year performance, the metaverse segment has significantly outperformed the market year-over-year with a +389% return. This includes assets such as Decentraland (MANA), Sandbox (SAND), and Axie Infinity (AXS). The performance remains positive with the inclusion of projects such as Apecoin (APE) and STEPN (GMT).
Excerpt from the report published by Kraken Intelligence
This phenomenon can be explained by the crypto community’s continued interest in virtual worlds, which were then completely new. While fashion provided them with all its advantages, users were quick to purchase a virtual land and thus used these famous coins associated with the metaverse. The most greedy were able to speculate on their prices at leisure as they did in the Bitcoin track for example, finding an audience of buyers.
The NFT market, which has made virtual worlds a real market and is still very popular, also plays a role in this phenomenon. As for the different brands, they never stopped showing interest in the metaverse and also kept pouring in there.
From a broader perspective, the metaverse has also been able to become a haven for battered investors and the public hard hit by news of war and global inflation, and find a breath of fresh air there thanks to its entertainment and virtual side. This created an entire ecosystem of visitors that allowed the cryptocurrency economy to grow and their coins to reach 400% growth within a few months.
However, contrary to popular belief, the metaverse has not been immune to the crypto crash that has decimated the industry and ended a steady rise in its associated tokens. While virtual worlds are still popular and investment continues to flow into them today, the related tokens have seen their price drop just like any other cryptocurrency.
Metaverse is far from the jungle. Some investors who have retreated from its economy as well as that of NFTs to continue speculating have only reinforced the fragility of its bubble, which in turn could burst at any moment. The more popular it is, the higher the risk.
Unfortunately, for Tony Tran, founder of Peer that builds technologies for the metaverse, the crypto field is ill-equipped to handle such an event. On the contrary, virtual worlds had appeared very early on, even before the blockchain had built a solid architecture for itself.
Everyone strives to make the blockchain as secure, fast, and decentralized as possible, but we argue that this is not the right problem to solve. It’s like building high-speed highways without 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 of the command line user interface did: we need to hide the complexities of the blockchain and expose the possibilities so that ordinary people can see them. […] Instead of bringing the physical world into cyberspace, we began mapping cyberspace directly onto the physical world.
Excerpts from Tony Tran’s introduction to the decoding media
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