The slow death of the Metaverse: How the big 4 tokens continue to plunge
At the height of the crypto market in 2021, terms like Metaverse, GameFi, and Play-to-Earn were all the rage. Fast forward to 2023, and many who bought into this vision are grappling with significant losses. The cumulative market cap of major metaverse projects such as The Sandbox, Axie Infinity, Enjin Coin, and Decentraland has plummeted 92% from its $16 billion apex in November 2021.
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The golden era of Play-to-Earn and Metaverse gaming
In the golden era of 2021’s crypto market, The Sandbox, Axie Infinity, Enjin Coin, and Decentraland led the pack. At their zenith, these tokens accounted for 0.5% of the global crypto market cap of $3 trillion. However, the chilly wind of crypto winter brought with it a slew of criticisms, from security and regulatory concerns to governance issues.
By September 2023, these tokens’ value had nosedived to a mere $1.23 billion, a sharp drop from their previous standing. To give this decline perspective, their market dominance now hovers at 0.12% of the global crypto market cap.
Investors and companies moved on to greener pastures
Despite attempts to revive the sector, with Apple’s Vision Pro launch being a great example, interest in the metaverse continues to wane. Even Facebook has backtracked its involvement in the Metaverse, after registering a $4 billion loss, to focus on AI (artificial intelligence) development.
Most investors who hopped on the metaverse bandwagon are now reeling from their losses. Axie Infinity, a play-to-earn sensation, and The Sandbox, the second-largest decentralized metaverse, are at the forefront of this decline. An astonishing 99.54% of Axie Infinity investors and 98.34% of those in The Sandbox are now nursing losses.
A golden opportunity?
While the landscape looks grim, with the market cap of these tokens plummeting, their declining dominance in the crypto world is more alarming, dropping by nearly 76%. Efforts by tech giants couldn’t stave off this decline and the SEC’s recent lawsuit, which saw major tokens classified as “securities”, contributed heavily to the drastic value drops.
All signs point to a bleak sentiment for the metaverse. Yet, there could be a silver lining. Astute investors might see this as a golden opportunity, diving in to buy at lower prices with hopes of a revival.
