Is the Metaverse About to Collapse? How Virtual Lands Shed 91%

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Metaverse
Is the Metaverse About to Collapse? How Virtual Lands Shed 91%

It turned its gaze to Facebook when the company rebranded to Meta in October 2021. As a result, the metaverse project was born, and organizations began registering their interest in the virtual ecosystem.

The Metaverse Is in Red

Following the unveiling of Meta, interest in the metaverse shot up, with firms ready to invest in the virtual space. Expectations of an alternate universe where people can live, work, and have fun have begun to gain traction. The idea is to create a reality similar to the real world where people can do just about anything.

However, the hype surrounding the metaverse concept is now in limbo as speculation on digital assets ceases. Reports indicate that the value of non-fungible tokens (NFT) in the custody of the top metaverse platform is in a downward trend. 

Major metaverse platforms like Decentraland, The Sandbox, and Somnium Space face revenue slumps of up to 95%. Meanwhile, the falling value of Ethereum’s token, Ether, is one crucial element in the continued decline of the importance of metaverse lands. Virtual lands appear to be in lower demand as the average land sale dwindles.

Sellers struggle to stay afloat due to the value of Ether against the dollar in the past twelve months. As the value of Ether slumped further, the metaverse lands became worthless in dollars. However, the drop in the sales of NFT on the three leading metaverse platforms and the value of the token used in their transactions coincidentally took a hit at the same time.

Is Selling a Good Option?

Individuals who have purchased plots of metaverse land on any of the three platforms during the price peak can hold on to their assets. Selling them is not advisable as the price of Ether might rise in the coming weeks.

Accordingly, their best bet is to wait for the value of Ether to spike before deciding on the next step.

Furthermore, the market situation is not as gloomy as envisioned because it does necessarily mean those holders of the virtual plots are down. The general sentiment is that the value of land plots in the metaverse has declined suddenly and is heavily influenced by speculation.

None of the three struggling metaverse platforms has done something extraordinary to arrive at their current status. This shows that overhyping and speculation lead investors to plunge their funds in, hence the bubble.

Interestingly, some are optimistic about a bullish NFT bull period to counter the gradual fall of the metaverse platforms. Despite the meltdown, prominent institutional players continue to purchase virtual lands. Digital plots provide brands with an alternative space to display and sell their products to their metaverse customers.

The metaverse ecosystem is still an attractive space for corporations to sell their wares, but the dip in price will affect their gains.

It will be interesting to see how the space will pick up and resume its upward trend in the coming weeks as the digital landscape battles with a market correction.

Ifeanyi Egede

Ifeanyi Egede is an experienced and versatile writer and researcher. He has keen interest in blockchain technology, cryptocurrencies, NFTs, Web3, metaverse, fintech and emerging technologies. He has tons of published works both online and in the print media. He has close to a decade of writing experience. When he is not writing, he spends time with his lovely wife and kids.