The Metaverse land value drops 80 percent

The real estate boom in the metaverse takes a downward turn. Metaverse land sales and prices fell significantly in the first six months of this year, leaving many virtual property owners wondering whether they made a good investment.  

The average sale price of digital land sank nearly 80 percent between February and June, from $16,300 to $3,330, The Information reports. The number of sales for virtual real estate also plummeted. Trading volume saw an even more significant decline, from $229 million in November 2021 to only $8 million in June 2022, down 97 percent. 

“The metaverse had so much hype at the beginning of the year and we’ve kind of lost it,” Eric Klein, founder of MetaSpace REIT, told The Information.

The un-real real estate became especially popular last fall after Facebook announced its rebranding as Meta. In the following months, several celebrities, including Snoop Dogg, Paris Hilton, and brands such as Nike, Adidas, and Gucci, invested in virtual real estate. 

By the end of 2021, real estate sales in the metaverse reached over $500 million, according to CNBC. The soaring interest in virtual land was expected to continue its rise this year. However, the entire crypto market began to tumble. 

The sharp decline in cryptocurrency prices led to the fall in digital real estate transactions. Between November and June, Bitcoin lost 70 percent of its value, falling from $69,000 to $21,000. Another popular cryptocurrency, Ethereum, dropped from an all-time high of $4,866 to $1,801. 

Resources:

“The Metaverse Real Estate Boom Turns Into a Bust,” by Aidan Ryan (The Information, 2022)

“Metaverse land prices down 80% in six months,” by TRD Staff (The Real Deal, 2022)

“Metaverse real estate sales top $500 million, and are projected to double this year,” by Robert Frank (CNBC, 2022)

“Facebook changes company name to Meta,” by Salvador Rodriguez (CNBC, 2021)

“Someone just paid $450,000 to be Snoop Dogg’s neighbor in the metaverse. Here’s how you can live by a celebrity too,” by Carmela Chirinos (Fortune, 2022)

“Bitcoin has lost more than 50% of its value this year. Here’s what you need to know,” by Carmen Reinicke (CNBC, 2022)