- August 21, 2022
Crypto Bear Market: Let’s Work on the Metaverse
Bear market: If you wait with the development of the Metaverse until the crypto winter is over, it’s too late, says Sam Huber, the CEO of Landvault.
The crypto market has been in a bear market since the end of 2021. Even now, after a 73 percent drop in crypto market capitalization since the peak in November, in all likelihood, there will be even more pain.
During this downturn, the entire crypto industry is at the beginning of the developing metaverse. It is a connected network of virtual worlds. Everyone can build a world according to their ideas in the Metaverse or contribute to another one.
The metaverse hype led to the fact that numerous banks, companies, brands and celebrities began to deal with this new virtual world. But during the meteoric rise of the crypto space in the summer of 2021, it was not easy to distinguish the dedicated developers from the short-term opportunists.
Now, less money is flowing into the crypto space than at any point in the last 18 months. So the bear market will act as a melting pot, forging only the most serious, long-term oriented metaverse projects.
Despite the negative aftertaste, bear markets are a favorable period for buying assets. And, perhaps more importantly, for the development of new projects. When cryptocurrencies are on the decline, fiat capital can make a huge contribution to building the infrastructure of a new platform.
For example, most of the foundations for the NFT boom of 2021 were laid after the market crash in 2018. Many investors didn’t care about the bear market at the time. However, passionate founders took advantage of the bear market to mine the first offers. These achieved significant increases in value after digital artist Beeple made the first major NFT sale.
The NFT hype has already reached its peak and has subsided somewhat again. However, another significant development is imminent: The Metaverse. Based on the developments of previous cycles, including a diverse ecosystem of cryptocurrencies and NFTs, the Metaverse will be a complete, interlocking set of virtual worlds and services. It will allow the seamless transfer of data and values between them.
The Benefits of Crypto Bear Markets
Due to the bear market, the cost of acquiring digital land has decreased. For those who now want to create value with the virtual real estate, there is a great profit potential.
There may soon be no better time to get involved in the development of a Metaverse project. Despite the current market situation, brands such as Nike, Gap and Meta (formerly Facebook) and even banks such as HSBC and JPMorgan are starting to establish a presence in the Metaverse.
These companies are pursuing a long-term strategy. In addition, they were aware of the risks before taking the plunge into the cold water.
In addition, Wall Street’s largest investment banks are already speculating on the future value of the Metaverse. Analysts at JPMorgan Bank believe that the Metaverse has an annual turnover of over one trillion US dollars could be achieved. And Citi Bank is even more optimistic and assumes that the Metaverse will be worth $13 trillion by 2030. Furthermore, more than 5 billion users worldwide should be able to be reached through the Metaverse.
Crypto Bear Market: This Could Happen in 2022
After 2018, for the first time there is a bear market again, in which the total market capitalization falls sharply. But even in the coldest winters, thaw comes at some point.
A silver lining is the next Bitcoin halving event. At this event, the mining rewards – i.e. the annual Bitcoin offer – will be halved again. Bitcoin is still an important market engine. The shift in supply and demand caused by these four-yearly events, so far, the Bitcoin price has increased in the months after the event. A bear market is therefore not too surprising. The development fits in with the typical market cycles that have been observed over the past ten years.
However, it has also been shown that cryptocurrencies are more or less correlated with many traditional investments. Years ago, it was hoped that digital assets would serve more as a hedge when the stock market falls. But that was not the case. Instead, cryptocurrencies are treated like any other ”high-risk” investment. Cryptocurrencies are among the first assets to be repelled if the market situation worsens.
The Metaverse and the Financial Markets
The financial market is in a bear market, which is exacerbated by macroeconomic events such as the announced interest rate increases. This shows us that the bottom could probably be much lower than we might have thought. But even if investors have to be prepared for the bears to stay for a while, this is not necessarily bad news.
Those who wait for public sentiment to change will jump on the bandwagon too late and are likely to find themselves in a catch-up. By bringing together solid talent and a strong vision for what the Metaverse can offer, developers have the potential to build cross–generational value – an opportunity that doesn’t come around often.
About the author
Sam Huber is the CEO of Landvault, formerly known as Admix. With over 100 specialized designers and developers, Landvault is the largest builder in the Metaverse. Sam has been a blockchain investor since 2013 and has personally invested in over 20 companies and various virtual land projects since 2017. Previously, he headed an indie game studio, and in a previous life was a Formula 1 engineer.
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