February 8, 2025
Trouble in the Metaverse: 99% of Investors Who Played to Win Are Now Counting Their Losses – Cryptosaurus

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The cumulative market capitalization of the “big four” metaverse projects peaked at $16 billion in November 2021 during the crypto market boom. On-chain analysis finds key factors that put 98% of Metaverse token holders in the red by 2023.

Trending words like Metaverse, GameFi, and Play-to-Earn dominate the crypto sector to top the market in November 2021. Barely two years later, most investors who got swept up in the metaverse hype are now counting their losses.

During the crypto market rally of 2021, The Sandbox (SAND), Axi Infinity (AXS), Enjin Coin (ENJ), and Decentraland (MANA) were arguably the four big projects that dominated the Metaverse and GameFi sector.

Notably, the four tokens had a cumulative market capitalization of $16 billion at their November 2021 peak. At the time, these Metaverse tokens represented 0.5% of the $3 billion global cryptocurrency market capitalization.

However, when the crypto winter began, there was widespread criticism of Metaverse projects, from security to privacy to community governance to the lack of long-term HODLing incentives.

As a result, SAND, AXS, ENJ and MANA are now collectively worth just $1.23 billion as of September 2023. This is a stunning drop of 92% from the $16 billion market capitalization recorded in November 2021.

To put this decline in proper context, the market dominance of these four Metaverse tokens has now dropped to 0.12% of the global crypto market capitalization.

Metaverse investors plunge into losses. Market Capitalization: ENJ, MANA, AXS, SAND | fountain: spirit

Market capitalization is a financial metric that represents the total value of the circulating supply of a cryptocurrency. It provides an estimate of the total value of the blockchain at a specific point in time.

By summarizing the market capitalization of the big four projects in the Metaverse, investors can get a clear idea of ​​the sector’s systemic importance within the broader cryptocurrency market.

This underscores that crypto investors have become increasingly disinterested in the metaverse sector over the past two years. And now they are allocating capital to other, more resilient sectors and new trends.

The game isn’t over yet, but those who got swept up in the 2021 metaverse hype are already counting their losses.

IntoTheBlock’s Historical In/Out of Money (IOMAP) data estimates the level of losses or profitability of all wallet addresses that hold a particular token. This is achieved by comparing current prices with the average cost of acquiring those tokens.

The IOMAP historical data presented below shows that the overwhelming majority of current ENJ, MANA, AXS and SAND holders are in losses.

Of the big four projects in the Metaverse, Axis Infinity and Holders of The Sandbox are among the worst performers.

Once known for its bustling in-game economy, Axi Infinity is an NFT-based online video game developed by Vietnamese studio Sky Mavis. Historical data from IntotheBlock now shows that 99.54% of all addresses receiving AXS are currently “out of the money”.

Metaverse investors plunge into losses. Historical Money In/Out Data – AXES, SAND | Source: IntotheBlock

In second place is The Sandbox Project, a virtual world where gamers can create, own and monetize their gaming experiences. 98.34% of those who bought SAND tokens are now underwater as well.

Meanwhile, Decentraland and Enjin Coin investors are also miles away from profits.

Decentraland became popular for its vibrant virtual marketplace and community hub where users create, buy and sell digital real estate. However, as of September 1, 2023, 89.04% of investors holding the original SAND token are also in negative territory.

Metaverse investors plunge into losses. Historical Money In/Out Data – Manna, ENJ | Source: IntotheBlock

The last of the four, the Enjin Coin Ecosystem, offers unique software that allows developers to create and manage virtual goods on the Ethereum blockchain. Native ENJ token holders have also suffered similar losses. Enjin’s 75.5% investors are also now in deep losses.

The chances of a comeback seem slim

Simply put, the cumulative market capitalization of ENJ, MANA, AXS, and SAND has fallen by 92% from $16 billion to $1.23 billion between November 2021 and September 2023. But most worryingly, the dominance of the Metaverse token has increased within the crypto industry. also shrunk. Up to about 76%.

The release of Apple’s Vision Pro and optimistic statements from Meta (Facebook) CEO Mark Zuckerberg have led to a mild revival in the metaverse sector in July 2023.

But now that momentum seems to be waning fast for a number of reasons. First, there are still criticisms regarding safety, long-term usefulness, and player retention. However, the US Securities and Exchange Commission (SEC) has also raised problems for Metaverse.

In June 2023, the SEC filed a lawsuit against Binance and Coinbase. Regulator lists The Sandbox, Axi Infinity and Decentraland “ValueIn presentations. After that, SAND fell by almost 44%, AXS by 33% and MANA by 40%.

In conclusion, the social sentiment surrounding the Metaverse is now extremely bearish. Nevertheless, it may attract strategic investors who want to buy on dips in hopes of future upside.

disclaimer

In accordance with Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to providing accurate and fair reporting, but market conditions are subject to change without notice. Always do your research and seek professional advice before making any financial decisions.

Source: cryptosaurus.tech

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