Virtual real estate is experiencing a crash as prices of land in various metaverses and sales volumes have fallen to the lowest levels in months. This is happening in the midst of a broader crypto downturn that has seen about USD 2 trillion erased from the market capitalization of cryptocurrencies.
The sales volumes and average prices of virtual land have significantly decreased for almost all projects, according to a dashboard Dune Analytics, an open-source data provider, that tracks metaverse sales.
Three of the biggest projects, Decentraland, The Sandbox, and NFT Worlds, had their worst month of the year in July, indicating that virtual real estate is experiencing a crash at the moment.
In the last month, the average cost of virtual land in Decentraland plunged to about USD 4,006, its lowest level in the previous 24 months. In contrast, the cost of land in this area in July 2020 was roughly USD 17,736.
Similar to how the average land price in The Sandbox has significantly decreased from its peak of USD 6,291 in January 2022 to USD 3,377 in July. NFT Worlds has been hit even harder, with its average price falling from a high of USD 18,095 in March to USD 2,328 in July of this year.
The volume of sales for these projects has also significantly decreased. Decentraland recorded sales of about USD 1.6 million in July, the lowest amount in the previous 24 months. In contrast, the metaverse reported a sales volume of over USD 10 million in the first month of the year.
The Sandbox also reported its lowest sales in more than 16 months, which fell to about USD 2.86 million in July, as opposed to a high of over USD 65 million in November 2021.
The decline follows a significant increase in virtual land prices that began in late 2020 and lasted until early this year. Sales of virtual land topped USD 85 million in January 2022 alone, according to a CNBC report, and they exceeded USD 500 million last year.
The fact that the real-world economy and the larger crypto market have both been severely affected by the conflict in Ukraine and the rise in inflation, among other factors, should not be a surprise given the collapse in virtual land prices in the metaverse.
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