The crisis in the cryptocurrency market and the NFT has caused the price of plots and land to fall. Sales are going down.
The craze for the metaverse seems to have faded. The value of cryptocurrencies has plummeted in recent months, impacting the metaverse economy causing a drop in the value of virtual plots of land. According to media data the information, The average price of a plot of land has fallen by more than 66% in five months. NFT Worlds, number three in the metaverse, sees its average land price drop to $2,328. It was 18095 in March. “The entire cryptocurrency world has begun to decline from the peak of November 2021‘,” notes economist Christophe Baroud. “The MANA and SAND coins, which enable transactions in the Decentraland and The Sandbox metavities, are much less valuable.The first lost two-thirds of its value, and three-quarters to the second.
“The real estate boom in the Metaverse area turns into a crash»
Another phenomenon that explains the bursting of the property bubble in the metaverse is that many land owners want to make a profit in the short term. They are rushing to resell what they’ve acquired (in about 6 months on The Sandbox). Speculators have multiplied since the advent of these virtual worlds, for which supply is low and demand is high. Excessive valuations of some lands frustrated investors. Real estate sales almost dried up. Between November 2021 and June 2022, the number of transactions decreased by 97% in Decentraland and Sandbox according to WeMeta market analytics. At the peak of November 2021, 16,000 real estate sales were recorded per day at Metaverse. Last June, there were only 2,000.
Virtual community is still very young
“Like many new phenomena, people followed fashion and bought anything and everything”, notes the economist. “Today’s buyers are looking closely at projects, looking to own the assets and find an added value to be achieved. But when you get into coding and see that everything is deteriorating, that discourages you from continuing “.
Today, it seems that speculation has calmed down and major investors are booking their shares.“Big companies like Carrefour, which have been looking for a marketing impact, will wait for some enthusiasm to return“.Christophe Barrow remains positive about the future of the marketplace on Web3.”We are in the process of consolidating these new virtual markets. It is still a young and mysterious phenomenon for many, which scares some investors. You have to be patient until the market reaches a certain maturity. Many projects and alternatives will be created for large sectors and competition will allow to balance the situation“.If prices are attractive to new buyers, we should be wary of an extension of this bad dynamic.