There's a real possibility that we've entered the crypto winter of our discontent, and that's weighing heavily on everything in the crypto space. Art-based NFTs have seen a drop in interest, and coin values are down appreciably pretty much across the board. A lot of this is due to investors fleeing to safer harbors, and really, who can blame them given the state of the wider economy?
But, oddly enough, interest in metaverse real estate continues to hum along. Maybe it's because metaverse real estate represents more than simple buy-and-hold transactions (or even buy-and-flip transactions). After all, metaverse real estate is also a business opportunity in disguise.
The bulls say buy metaverse real estate
Metaverse real estate prices are indeed lower than they've previously been -- but it's also true that this is just another part of the wider investment market slump. Although metaverse real estate held out fairly long for a virtual asset, it had to eventually feel the downward tug of gravity just like the rest of the world. But that doesn't mean that the party is over. Heck, it's barely begun.
A couple of things I'm seeing right now point to a continued bull case for metaverse real estate. First, there are still many more buyers than sellers in the market, which likely means that the people selling are not simply land flippers or people shedding their losses. If people were fleeing and hoping for a quick sale, there would be many sellers and a few bullish buyers concentrating their holdings.
In the charts below, you can see the seller-versus-buyer situation in both Decentraland (MANA 3.59%) and The Sandbox (SAND 3.83%). In both cases, the average number of daily sellers is much lower than that of daily buyers per month.
In the case of Decentraland, in May, the average number of daily buyers was 22.30 versus 18.43 daily sellers. Over the month, 669 unique buyers purchased real estate in Decentraland, compared to 553 who sold. That's up slightly from April's averages of 20.20 daily buyers and 16.17 daily sellers, which amounted to 606 unique buyers and 485 unique sellers in total.
Data source: Nonfungible.com. Chart by author.
The story for The Sandbox isn't much different, with an average of 39.233 daily buyers in May versus an average of 32.467 daily sellers. That equated to 1,117 unique buyers over the month and only 919 sellers.
Data source: Nonfungible.com. Chart by author.
A lack of available land is holding sales back
The other thing that has me seriously bullish is the simple lack of land for sale. It's not a fancy point to make, but it's an important one. If the bottom were falling out of the market, there would be many more listings available to purchase, which would depress values further.
But that's not at all what we're seeing. In fact, there are only 271 listings for land in Decentraland (0.28% of the total lands available) and 1,967 listings for land in The Sandbox (1.38% of total lands available) as of June 22, 2022. Even Bored Ape Yacht Club's (APE 10.44%) Otherside, which is still in an active growth phase, has only 4.27% of its total land available for sale.
Not to drive the point home too much harder, but those big sales that made headlines months ago are still happening regardless of the number of properties out there or the value of these world's coins. Decentraland EST #4973 sold for $55,000 on June 16, 2022, the same day that EST #4975 brought $50,000, EST #4974 raked in $47,000, and EST #4977 earned $40,000. (Watch that space, because someone certainly seems to be planning something...)
In outstanding sales for Otherside this week, Otherside #11599 sold for $169,788.65 on June 22 after having been acquired the day before for $143,707.53.
If the metaverse were going to be a flash in the pan, surely this so-called crypto winter would have frozen it solid. Instead, what we're seeing is a steady stream of interest and continued project building within these worlds. For the right buyer, getting into metaverse real estate right now represents a potentially huge opportunity. However, there's always significant risk with something as new as this, so please keep that in mind as you make your investment decisions.
