Metaverse land prices’ collapse sparks debate on viability of virtual worlds

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The aver­age price and trad­ing vol­ume of vir­tu­al land in the Meta­verse have col­lapsed amid the wider down­turn in cryp­tocur­ren­cy mar­kets, accord­ing to an analy­sis con­duct­ed by the Infor­ma­tion.

Aver­age vir­tu­al land prices have fall­en by more than 80%. At the same time, trad­ing vol­ume is down by more than 90% from Novem­ber 2021 highs.

The infor­ma­tion was sourced from WeMeta and com­piled from data on the Sand­box, Decen­tra­land, Vox­els, NFTs Worlds, Som­ni­um Space, and Super­world platforms.

Metaverse virtual land volume and average price
Source: @theinformation on Twitter.com

The Metaverse bust

Meta­verse vir­tu­al land was tout­ed as the next big thing not that long ago. Spik­ing inter­est had trig­gered a rush to acquire prime spots – mir­ror­ing the real-life real estate market.

For exam­ple, as recent­ly as Feb­ru­ary, one investor paid $450,000 for a vir­tu­al plot next door to Snoop Dogg in the Snoop­verse, which runs on the Sand­box platform.

This push large­ly came off the back of Face­book rebrand­ing as Meta, in Novem­ber 2021. Meta CEO Mark Zucker­berg called the Meta­verse the next fron­tier in con­nect­ing peo­ple. Specif­i­cal­ly, he envi­sioned vir­tu­al worlds as fun­da­men­tal­ly chang­ing the way soci­ety works. Includ­ing rev­o­lu­tion­ary con­cepts, such as Meta­verse busi­ness­es pro­vid­ing employment.

But, fast for­ward to now and deep into cryp­to win­ter, buy­ers who entered at the top are nurs­ing heavy loss­es as aver­age prices and inter­est have plummeted.

Virtual reflecting the macro

The crash has re-opened the debate on whether vir­tu­al land is a bonafide investable asset. As men­tioned by For­tune, the Meta­verse incor­po­rates instant tele­por­ta­tion to any loca­tion. That being so, unlike the real world, there is lit­tle advan­tage to buy­ing in a prime location.

In addi­tion, land in the Meta­verse can be infi­nite, putting paid to the idea of vir­tu­al land as a scarce resource.

How­ev­er, Meta­verse land co-oper­a­tive Air­dott attrib­uted the down­turn to the wider macro­eco­nom­ic land­scape, say­ing, “why wouldn’t” the real world impact the vir­tu­al world? They added that they are “patient­ly wait­ing” for things to bounce back.

Over the past two years, prop­er­ty prices have run red hot due to buy­ers’ demand. But, some real estate experts now say the boom is over due to the squeeze on house­hold bud­gets from ris­ing infla­tion and the threat of cen­tral banks con­tin­u­ing to increase rates.

A recent arti­cle from the Guardian point­ed out that Chi­na is expe­ri­enc­ing plung­ing new prop­er­ty sales. At the same time, the U.S mar­ket has seen the aver­age price of homes drop sharply in June.



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