NFT, Metaverse Tokens Join The Current Crypto Bearish Downtrend

The latest market data analysis confirmed that most of the biggest non-fungible tokens (NFT) and Metaverse assets have sharply tumbled in the past few days as the current bearish downtrend continues to bite the markets.

Many NFTs and Metaverse started in a bullish run, with a large number of users attracted by how the new tech sought to drive mainstream adoption through NFTs and gaming during launch. Despite the mainstream adoption, many Metaverse and non-fungible token (NFT) assets are today lighting red candles.

According to CoinMarketCap, popular NFT, ApeCoin (APE), is down 6.46% in the last 24 hours, while Decentraland (MANA) dropped 9.18% over the same period. Additionally, Axie Infinity (AXS) has also experienced a reduction of 8.55%, trading at $21.03, and Sandbox (SAND) plunged by 9.45% to $1.29.

The bearish downtrend showcased by the NFTs and Metaverse tokens reflects the general negative downtrend in the entire crypto ecosystem. Bitcoin is a perfect example, shedding 3.89% to $29,354 in the past 24 hours, with combined crypto market capitalization also down 3.85% to $1.2 trillion over the same period.

Notably, the distinction between Bitcoin and other few Layer-1 blockchain tokens compared with NFT and Metaverse coins is their functionality and unique set of utilities that would continue driving their demand. But, at this time, the current assets outlook and subsequent price valuation are down because there is a significant decline across the board.

NFT And Metaverse Tokens Highlighted

Since last year, many NFT projects and Metaverse assets started with a very high bullish run. At the time, most users were attracted to the space by how the new Web3 technology sought to drive mainstream adoption of NFTs and play-to-play (P2E) gaming.

The Sandbox is a perfect example, attracting many users at launch. The virtual real estate venture allowed users to buy plots of land as NFTs. Unfortunately, despite incorporating major multinational brands such as HSBC, Sandbox has experienced formidable challenges retaining customers and its landed NFT holders.

According to Messari, the digital land sales on the Sandbox were down 54% in Q1 2022 compared to Q4 2021. The platform also has a 7% retention rate for landowners holding their assets after a year of purchase. Unfortunately, 10% of landowners sold off their Sandbox properties after a month, while 72% of owners claimed their assets after three months.

Axie Infinity is another perfect example, gaining mainstream adoption last year before its recent network hack. At the time, its woes featured many factors beyond the general market dump. The infamous network exploits “Ronin Bridge” massively affected the toll on startups in the past few weeks, with the revenue from the utilization of gaming platforms dropping immensely.

Data acquired from Nansen confirms that Axie Infinity now records just $5,500 in daily revenue from breeding and marketplace from its all-time high of $17.5 million per day recorded in August 2021. This performance represents a 99% decline.

In the meantime, the inconsistent engagements with the ideals of the NFTs and Metaverse token have remained the dominant cause of the recent crypto market downturn. Therefore, unless these sentiments change across the board, the current downtrend may continue draining out the reserve and valuation of those assets.