NFT and Metaverse Tokens Plummeted Due to Bearish Sentiment

Written by C, Fiona

Last updated: 2022-05-25

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Most NFT and Metaverse tokens were very bullish at the beginning, as users were surprised at the way each protocol sought to promote the mainstream adoption of NFT and games at the time of launch.

Today is not one of the best days for digital tokens related to Metaverse and non fungible tokens (NFT), because most transactions are red. According to coinmarketcap, Apecoin (APE) fell 6.46% to US $7.58, while decentraland (MANA) fell 9.18% to US $1.03, the price of Axie Infinity (AXS) further decreased 8.55% to US $21.03, and the sandbox (sand) plunged 9.45% to US $1.29.

The bearish outlook of swallowing NFT and Yuan tokens is a reflection of the general negative sentiment in the broader cryptocurrency ecosystem. Led by bitcoin (BTC), it fell 3.89% to $29354.64, and the combined market value of cryptocurrency fell 3.85% to $1.26 trillion.

Bitcoin and some Layer-1 blockchain tokens are different from NFT and Metaverse coins in that the latter plays a unique set of functions and will continue to drive their demand. At this time, the prospect of coins and the subsequent price valuation were cut off because the overall demand was falling sharply.

Look inward at NFT and Metaverse tokens

Most NFT and Metaverse tokens were very bullish at first, because users were surprised at the way each protocol sought to promote the mainstream adoption of NFT and games when it was launched.

For example, sandbox is a virtual real estate world, and users often buy plots in the form of NFTs. Although some major multinational brands, including HSBC, have landed in the sandbox, the platform has encountered great challenges in retaining customers or NFT holders.

According to the data, compared with the fourth quarter of 2021, the land sales on the sandbox decreased by 54% in the first quarter of 2022. Data from MESARI shows that the platform has a retention rate of only 7%, that is, the landowners who still own their assets one year after purchase. About 10% of people sold their sandbox property after one month of purchase, and only 72% claimed ownership after the first three months.

Axie Infinity’s dilemma has many characteristics or influencing factors, which exceed the downturn of the overall market. In the past few weeks, the ronin bridge of the platform has been hacked, which has had a very negative impact on the start-up company, and the revenue generated by using the game platform has also decreased significantly.

According to Nansen, Axie Infinity now records a daily revenue of only $5500 for breeding and marketing expenses, down 99% from the record high of $17.5 million per day recorded in August 2021. These agreements that are inconsistent with the ideals of NFT and Metaverse tokens remain the main reason for the recent sharp decline in prices, which may continue to deplete the reserves and valuation of these tokens unless sentiment changes across the board.

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