Just like in real life, in the metaverse, the new virtual world everyone is talking about, land and house prices are subject to market fluctuations and respond to the logic of supply and demand.
Virtual land prices fell by 18%
After land prices reached an all-time high in February, now fell by 18%, at least by index Meta Metriks which measures 30 major virtual worlds currently present. This is also reflected in the decline of all major tokens that deal with the metaverse sector and the sale of land and houses in the virtual world.
Decentraland, The Sandbox and Axie Infinity fell by 40/50% from record highs in November last year.
But always, according to Meta Metriks, prices are rising sharply. Experts from the analytical company therefore believe that investing in the land or tokens of companies in the metaverse sector is an excellent investment, even better than BTC or ETH.
Metaverse: is it still a good investment?
Meta Metriks states that in March, properties in metaverse gained 2.6 times more than ETH in the last year. Some items sold within this segment have a return on investment of 14,000%. According to experts, what drives prices and return on investment in virtual land is determined primarily by the lack in major metaverse platforms such as Decentraland or The Sandbox.
The Sandbox currently has 166,464 plots of about 96 x 96 m2. Decentraland, which is managed by an autonomous decentralized organization (DAO), has 90,601 plots of land, but only about 44,000 of them are for private purchases and sales.
Many large companies such as Pricewaterhouse, Coopers, Adidas and Warner Music Group have already invested in the purchase of virtual land in metaverse. Brands are evolving and facing younger demographics immersed in gaming.
Tim Sweeney, CEO of Epic Games, the company behind Fortnite, recently claimed that:
“Metaverse has the potential to become billions of dollars in the global economy in the coming decades.”
The largest investments recorded in the sector to date were Republic Realm, a metaverse and NFT investment company that paid $ 4.3 million last year for land in The Sandbox and the purchase of land for $ 2.4 million in Decentraland.
However, some experts believe that all of these virtual plots could eventually become worthless, because while platforms claim to be limited in size, in fact, the metaverse should not be limited in space. Many companies could soon join, which would inevitably cause the value of the land itself to decline.
Despite these statements, traditional investors see potential in virtual ways to own existing buildings: Citi and the British investment group Abrdn also explore ways to buy and sell tokens of existing real estate.