99% of investors in Play-2-Earn incur losses: what happens
Date: 2023-09-03 Author: Karina Ziganova Categories: BUSINESS, IN WORLD
During the peak of the bull market in November 2021, the combined market capitalization of the "big four" gaming projects - The Sandbox, Axie Infinity, Enjin and Decentraland - reached $16 billion. However, at the moment, almost 99% of the holders of these tokens are suffering huge losses.
Just a couple of years ago, terms like “metaverse,” GameFi, and Play-to-Earn dominated the cryptocurrency space. However, now they are remembered less and less. We are looking into whether game projects have a chance to regain their former popularity.
The market capitalization of the most popular Play-2-Earn tokens fell by 92%
During the 2021 rally, The Sandbox (SAND), Axie Infinity (AXS), Enjin Coin (ENJ), and Decentraland (MANA) dominated the GameFi and Metaverse segment. At the peak of the bull market, their combined capitalization was $16 billion.
However, with the onset of the crypto winter, gaming projects have been widely criticized, ranging from security and privacy to community management and lack of long-term incentives for investors.
As a result, as of September 2023, the total capitalization of SAND, AXS, ENJ and MANA is only $1.23 billion, which is 92% lower than in November 2021. The dominance of these tokens has decreased from 0.5% to 0.12% of the global cryptocurrency market.
This means that over the past two years, users have gradually lost interest in the metaverse, redirecting capital to other, more sustainable sectors.
Most Metaverse Investors Are Losing
The historical data of the IntoTheBlock platform allows you to evaluate the level of profitability of all addresses where a particular token is stored.
According to them, investors Axie Infinity and The Sandbox are the worst off. The chart below shows that 99.54% of AXS holders and 98.34% of SAND holders suffer losses.
However, Decentraland and Enjin Coin investors are also far from profitable. As of September 1, 89.04% of those invested in MANA and 75.5% in ENJ were in the "red zone".
The chances of a return of interest in Play-2-Earn are decreasing
Even more troubling is the fact that neither the launch of Apple's Vision Pro nor the optimistic statements of Meta* CEO Mark Zuckerberg have caused enough excitement in the Metaverse and Play-2-Earn sector.
Things got even worse when the US Securities and Exchange Commission (SEC) listed The Sandbox, Axie Infinity and Decentraland as unregistered securities. Since then, SAND has fallen by about 44%, AXS by 33% and MANA by 40%.
In conclusion, it should be noted that the mood of members of the crypto community regarding metaverses and game projects is currently bearish. However, such a massive drawdown could attract strategic investors who are hoping for significant profits in the next bull market.
