Although Bitcoin (BTC) and other cryptos have over-corrected in 2022, bears have been harsher on Axie Infinity (AXS) and The Sandbox (SAND). The purpose of this article is to show the reasons for this collapse.
What about the other cryptocurrencies that also performed very poorly? Altcoins like Terra Classic (LUNC), FTX Token (FTT) and Solana (SOL) have obvious reasons for their declines. After all, they are all linked to the biggest blockchain industry scandals of 2022.
previous land (LUNA), for example, was one of the great highlights of decentralized finance (DeFi). However, it was connected to an algorithmic stablecoin, and when it lost its peg against the US dollar, billions of LUNA units were created for this peg to hold. As a result of this mismanaged decision, all capitalization of the altcoin disappeared.
FTT is the token of one of the most promising crypto platforms, FTX. However, a major scandal began in November when it was discovered that the cryptocurrency exchange was not keeping its clients’ money in custody, but instead sending it to Alameda Research, another company owned by Sam Bankman-Fried (SBF).
In addition, a document was presented shared in the press showing that the reserve values of SBF companies were backed by the token issued by FTX itself. The market repudiated this whole situation and the insolvency rumors turned out to be real, causing investors to abandon the FTT.
Solana (SOL), one of the main competitors of Ethereum (ETH), also entered this story in a negative way. from SBF supported the altcoin and Alameda owned many units of the cryptocurrency, investors decided they would not be in the same boat and abandoned crypto. The altcoin managed to be surpassed in capitalization even by the altcoin meme Shiba Inu (SHIB).
But what about Axie Infinity and The Sandbox? Why have they gone down so much in the last 12 months?
NFT market and metaverse down
When the crypto market begins to correct itself, those who suffer the most are the early adopters. This is because they are considered the most dangerous. Looking at how cryptocurrencies have been corrected, it is possible to analyze this clearly. BTC was affected, but not as much as Ethereum, which did not lose as much capitalization compared to its rivals.
DeFi, on the other hand, has managed to outperform the non-fungible tokens (NFTs) and metaverse industry because it is an environment that has been developing for some time in the crypto market, causing investor confidence to remain in the decentralized finance.
Also, the hype of NFT arts in 2021 damaged the image of this market a lot. The art was sold solely with the intention of making a profit and offered no value to match the price, causing fear among those seeking projects with value for their investment and not just a fad.
Of course, the game market also helped make this happen. Crypto investors who have been in touch with the market for some time know that Axie Infinity is the best project when it comes to NFT games. The AXS game was known for the huge winnings it offered to its players. Some players even quit their jobs to make card battle game with cute avatars their main income.
Surely this was never going to work because if the main income came from the game, obviously the tokens received in the game would be turned into cash because people need to survive outside of the game. The token sale caused the asset received for playing, SLP, to lose its market capitalization, making Axie Infinity less attractive to regular players.
Just like in the arts, Axie Infinity and other NFT games proved that players were only there for the money and not the gameplay, and something like this could never be sustained. Although updates have been made to the famous blockchain game, they have not been able to bring attention back to Axie Infinity, which no longer has players like it used to, and may never have them again.
What about the litter box?
In addition to the game market crash, the metaverse is no longer a hot topic among the crypto community. The fact is that many companies, institutions and countries have decided to embark on a virtual universe, but this does not mean that they are interested in buying tokens like SAND, for example.
Already within the crypto market and the world of games and technology, some experts are skeptical of the metaverse, believing that it needs a lot of development. Sandbox is still not user friendly enough to warrant a large migration of people to it.
However, this does not mean that The Sandbox team has been sitting still this year. Developments were made, but they were also not a bullish catalyst for SAND, which in the last 12 months has lost 93% of its market capitalization, just as AXS has experienced the same correction.