Summary
There is an unbelievable reduction of the Metaverse market worth of 23.54 billion down to 4,9 billion. The Metaverse is not completely dead yet although many investors have turned their attentions to AI, DeFi and Real World Assets (RWA). According to the latent distribution of Cost Basis (CBD) defined by Glassnode, it appears that a large number of investors continue holding and purchasing their Metaverse cryptocurrencies such as SAND and MANA. In spite of the decay of hype, companies such as Meta, Apple, or Nvidia invest in VR and AR, and it is possible to see how the Metaverse may evolve.
The Metaverse Market Catastrophic Fall
The Metaverse market that had been dubbed as the future of the online world has lost its value significantly. The data in 2021 showed that the Metaverse had a spectacular estimate of over twenty-three billion dollars with companies and investors rushing into the area hoping to get a slice of what many thought would become the next frontier of the internet. The new technology and virtual worlds, digital property, and immersive experiences appeared to be the logical continuation of technology, and the number of participants in the sphere is massive. Nevertheless, the hype did not meet the expectations.
Jump to today, and the Metaverse market has almost completely lost its value as it is estimated at only $4.9 billion, or 80 percent less. Such huge drop has cast doubt whether Metaverse will last due to the fact that some of the most promising projects and virtual worlds still have a long way to go in reaching the mainstream popularity as was once expected of them. The Metaverse space in its vision looks a bit lost, with the vision of the completely immersed digital world yet to flesh out in the way it was supposed to be.
The investors change their minds
So with the market of Metaverse projects cooling, a lot of these investors have switched to something different. As the value has decreased, large investors which have been injecting funds into the space in the beginning lost interest and turned to other aspects of the blockchain and tech world which appear more promising. Specifically, such areas as artificial intelligence (AI), decentralized finance (DeFi), and Real World Assets (RWA) became more appealing to invest in. These become spheres of quick evolution and increasing popularity, which has led to Metaverse becoming subordinate to the tech arena in general.
Consequently, one may get a feeling that the Metaverse is about to become extinct. The initial hype of virtual worlds is already past and several investors are less enthusiastic about a bright future of these computer worlds. Nevertheless, although the space had cooled down, this does not necessarily mean that Metaverse has disappeared. Although it is not as big in the spotlight it is in a couple of years ago, there is still a group of investors who hold hope about its future.
Is there hope in the metaverse?
Irrespective of the negative trend, a more detailed examination of some of the chief indicators shows that the Metaverse is not yet completely left out. According to Glassnode, one of the most reliable blockchain analytics companies, Cost Basis Distribution (CBD) is an indicator that reveals that there are still large numbers of investors whose Metaverse tokens have not been sold yet. Actually, a lot of people are going out and purchasing them more and more and that indicates that people still have a sense of belief in long-term long-run prospects of such projects even though there is fluctuation in prices.
As an example tokens such as SAND (The Sandbox) are being bought in spite of their decline in value. This shows that there are investors, who consider these virtual worlds and their related tokens as long-term investments, as opposed to this-year speculation. Other Metaverse tokens are behaving in the same way (MANA (Decentraland) has been trading in increased purchasing volume around the $0.60 mark. Some investors are still making use of low prices as the value is going down and this proves that the market is not that worried.
Besides, the AXS (Axie Infinity) has been accruing continuously within the last 2 years. This indicates that there are some investors who are not selling their tokens yet, they even have the temptation to sell, but they do not want to do it, even the market is volatile. Rather, they are reducing their cost basis with the hope that the project would turn up one day. Such an attitude indicates that although the Metaverse is not that hyped anymore, it leaves room of excitement to people who just need to be patient.
What is the Future of the Metaverse?: Evolving, Rather than Disappearing
MEXC COO Tracy Jin explained why Metaverse has not been living up to expectations. In her opinion, the boom behind the Metaverse projects dwindled due to failure to meet the huge expectations that had been set out initially. The bubble of these projects has significantly burst, but still the technology was promising but has not reached yet to the mainstream. This has seen a lot of investors shift to industries that can give quick payback and are more concrete in nature.
This does not imply that Metaverse is doomed though. Rather it is changing. The Metaverse does not resemble other blockchain projects, such as memecoins or DeFi platforms, since it turned out to be dependent on real use and adoption. The virtual world technology requires a place in a real world in order to survive and given the absence of such, the projects tend to sink. This has prompted what is seemingly being referred to by some as a liquidity trap, whereby there are not enough buyers to carry the market.
It does not imply that the Metaverse is finished yet though. In case blockchain-based projects will be able to invent some means of using them to gain more adoption and provide value to users, all hope that the Metaverse will make a comeback is not lost in the future. The industry is currently on an emergency plane and the investors are awaiting and seeing what will happen and they hope to see the resurrection.
The Further Investment of Big Tech
Although the investment community, in general, has moved on the Metaverse appears to still be receiving heavy investment in the underlying technology that may facilitate the future of the Metaverse at major tech companies. Such corporations as Meta (previously Facebook), Apple, Nvidia still invest in virtual reality (VR) and augmented reality (AR), the most important part of Metaverse. The fact of such investment implies that the Metaverse concept is not dead yet.
These corporate giants are putting large bets on the future of the VR and AR, which are core technologies in the Metaverse development. Although Metaverse projects initiated with blockchain may not be going so well, the fact that large tech firms continue to invest in the Metaverse domain means that it is still in the stage of transformation. Whether it appeared in 2021 or not, it might not appear the way it does in the future, but there is the chance of the more polished and sustainable Metaverse.
Conclusion
Metaverse is not dead, it might have become a cooler topic back in its day. And though the market has undergone immense hardships and the initial hype seems to be a thing of the past, there are considerable numbers of investors who are patiently keeping their tokens hoping that a rebound will occur. Moreover, large technology corporations are still investing in the underlying technologies that may propel the Metaverse, which indicates the fact that the idea is not dying away. Even though blockchain projects may manage to evolve and discover some new means of appealing to users, the Metaverse might still experience a rebound, only that it will be a different one. The road is not yet finished, and Metaverse might just have some future.