Metaverse Struggles Amid Crypto Market Rebound

• Tokens.com faced significant losses with its Decentraland investment, prompting a pivot to AI-powered humanoid robots and new ventures.
• Metaverse property loans faced challenges as TerraZero Technologies experienced setbacks due to declining land values and speculative applicants.
• Experts suggest fiat currency and centralized assets as essential for metaverse success, highlighting the desire for ownership in virtual worlds.

Despite the recent recovery in the cryptocurrency market, the metaverse built on digital assets is facing significant challenges. The launch of spot Bitcoin exchange-traded funds in January and endorsements from figures like Donald Trump have helped digital tokens recover from the FTX collapse. 

However, the metaverse, an interconnected system of digital worlds, is struggling to deliver on its promises. Built around blockchain technology and digital tokens, the metaverse was visualized as a space where creators could monetize their work without interference from big tech. Yet, key metrics like NFT prices and platform-associated tokens are mostly on the decline.

Tokens.com Metaverse Investment Declines

Tokens.com, once optimistic about the metaverse, experienced a drastic fall in its virtual real estate portfolio. The company invested $2.5 million in Decentraland, a virtual world offering activities like poker and fashion shows. Andrew Kiguel, CEO of Tokens.com, likened the investment to buying land in a growing city.

 However, scandals in 2022 severely impacted Decentraland and similar platforms. According to DappRadar, Decentraland’s property values dropped by 95%, and the cryptocurrency Mana is now trading at less than 30 cents, down from over $5 in 2021. This significant decline has forced Tokens.com to pivot from the metaverse to developing AI-powered silicon humanoid robots.

Metaverse Mortgages Experience Setbacks

TerraZero Technologies Inc., a company that ventured into offering metaverse property loans, faced setbacks after the 2022 collapse. In early 2022, the company issued a $40,000 loan for a digital property. However, the crash in land values led to the return of this mortgage at cost. 

Dan Reitzik, TerraZero’s CEO, stated that mortgage applicants were purely speculating and had no plans to develop their purchases. The complexity of crypto and NFTs for average consumers and the lack of readiness from brands were cited as challenges.