Metaverse housing bubble bursting? Digital land costs crash 85% amid waning curiosity

The metaverse sector is witnessing its very-own housing disaster second, because of huge declines within the costs of its digital lands in 2022, led by waning customers’ curiosity and a crypto bear market.

Land gross sales plunge 85% in 2022

Particularly, metaverse tasks constructed on the Ethereum blockchain, together with the Sandbox and Decentraland, have witnessed substantial declines in their valuations and other key metrics, data from WeMeta shows.

For instance, the average price of lands sold across Decentraland peaked at $37,238 in February 2022. But as of Aug. 1, their costs had dropped to an average of $5,163. Similarly, the Sandbox’s average sale price dropped from circa $35,500 in January to around $2,800 in August.

Average sale price of virtual lands on Ethereum metaverse projects. Source: WeMeta

Overall, the average price per parcel of virtual lands across the six major Ethereum metaverse projects dropped from approximately $17,000 in January to around $2,500 in August, or a 85% decline. 

Declining metaverse volumes

Poor land sale volumes further indicate dampening user interest in Metaverse projects.

On a weekly average, the volume, which represents the amount of lands (derived in currency) traded, has dropped from its peak of $1 billion in November 2021 to approximately $157 million in August 2022.

Metaverse land sale volumes. Source: WeMeta

Simultaneously, the market valuations of the Metaverse tokens in circulation have dipped by more than 80%, led further by a broader retreat across the cryptocurrency sector due to unfavorable macroeconomic conditions.

For instance, the market valuation of Decentraland’s MANA tokens in circulation dropped from $10 billion in November 2021 to $2 billion in August 2022. Similarly, Sandbox’s SAND’s net capitalization reached $8.4 billion to around $1.78 billion in the same period.

Metaverse ETF additionally takes ahit

In the meantime, the Roundhill Ball Metaverse exchange-traded fund (METV) is tanking alongside blockchain-focused metaverse tasks. The ETF offers buyers publicity to corporations which have been using the Metaverse of their progress technique,

On the each day chart, METV has dipped by practically 45% from its file excessive of $17.11 in November 2021, with the businesses iits inventory portfolio, together with Meta (previously often known as Fb) and Snap, reporting substantial second-quarter losses.

METV each day value chart. Supply: TradingView

Nonetheless, companies, enterprise capital funds and personal fairness buyers pour over $120 billion into the Metaverse sector between January and Could 2022, greater than double the $57 billion invested in all of 2021, in accordance with a latest McKinsey report.

Associated: Fb’s metaverse will ‘misfire,’ says Vitalik Buterin

Regardless of the decline within the metaverse market, nevertheless, McKinsey believes the house can develop into a $5 trillion sector by 2030, noting that e-commerce will seemingly notice a market impression of between $2 trillion and $2.6 trillion alone, adopted by the educational digital studying sector, which might have an effect of $180 billion to $270 billion.

The views and opinions expressed listed here are solely these of the creator and don’t essentially mirror the views of Each funding and buying and selling transfer includes danger, it’s best to conduct your individual analysis when making a call.