The metaverse hype that began in 2021 dissolved almost entirely by the end of 2022 as the top projects in the space, Decentraland, and The Sandbox, lost 95% of their market capitalization. The most prominent reason for the fall was lack of usage growth.
Still, the metaverse narrative is far from dead and will grow in the future. Reportedly, Apple will launch its VR gear sometime in spring 2023. The announcement was a positive catalyst for MANA and SAND, causing a double-digit price surge.
While there’s evidence of positive buying volume supporting the pump, the weak fundamentals of metaverse platforms and overheated market indicators suggest that the price pump risks reversing quickly.
The Apple pump and dump
Facebook’s (Meta) foray into the metaverse was one of the most prominent catalysts for metaverse tokens. The idea for Decentraland and The Sandbox’s growth is that a decentralized metaverse would flourish more than Meta’s centralized version.
However, technology has yet to become popular among the masses. In 2022, the percentage of VR users among Steam gamers was less than 2%, and the usage has yet to grow over the past two years. This is discouraging for the technology’s adoption because the gaming sector was the first to embrace it.
The technology suffers from a fundamental issue where VR headsets are unsuitable for long hours. Studies have found that prolonged usage of headsets can cause mental health problems.
Apple’s recent VR news caused an uptick in their metaverse tokens, but it doesn’t necessarily translate to the success of these projects. Samsung and Oculus, owned by Meta, already have devices in the market, raising the question about the potential impact of Apple’s new devices on VR adoption.
Poor usage data hinders the reality of a sustained metaverse token rally
Arguably, metaverse euphoria peaked in the last quarter of the same year when Facebook rebranded to Meta. However, the usage statistics of the two most popular metaverse platforms, Sandbox and Decentraland, remained unimpressive throughout the price surge. Less than 5,000 unique active wallets (UAW) were interacting with the smart contracts at the peak on both platforms.
Since then, the usage has decreased even further, with less than 1,000 UAWs per day, reflecting terrible…
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