Decentraland And The Sandbox Rallies May Soon End And 3 Reasons May Cause That

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It was in 2021 when the hype for the metaverse rose to all-time highs and became the shiniest star. Unfortunately, the star’s brightness is constantly dimming.

All the success and the hype that the metaverse industry had gained throughout the year 2021 died down as the year 2022 came to its end.

MANA and SAND Went Down

The top projects in the metaverse industry were Decentraland (MANA) and The Sandbox (SAND). Among all major projects from within the metaverse, it was these projects that recorded the major declines.

The data shows that in the year 2022, the market valuations of these projects kept on plunging. As the year 2022 came to an end, the valuations of these projects came down by 95% individually.

The reason why these projects have ended up losing most of their valuations is because of the growth rate. The growth rate of users on these particular projects has been extremely low.

Due to the lack of user growth, these projects have ended up losing all the traction and support they had.

Metaverse is Going Nowhere

Despite the downtrend in the year 2022, it cannot be perceived that the metaverse industry is over. The industry is not dead and it is not going anywhere.

The industry is going to stick around just like Bitcoin has for over a decade. Multiple developments have been taking place that may help push the metaverse to a higher level.

Apple Supports Major Projects

Just recently, Apple announced that it was working on its virtual reality gear. They revealed that the gears are currently in the development phase but they will be releasing them very soon.

Apple officials recently announced that they will be launching the new gear in the spring season of 2023. This ended up causing a major frenzy in the entire metaverse industry.

The announcement by Apple pushed the confidence level of the MANA and SAND investors who started to rally in their favor.

The update shared by Apple literally worked like a positive catalyst that caused the trading prices of both assets to surge tremendously.

The data shows that the trading prices of MANA and SAND experienced double-digit surges in the recent trading sessions.

Even the trading volume is moving higher, which means that the pump is not a pretentious one. Instead, the investors are actually supporting the trend and they want to push the trading price of these assets higher.

Although these asses are very attractive at present, there are a few reasons that may indicate a downtrend for these assets.

Therefore, it is important to be aware of these reasons so it can be assessed exactly where the rallies for these assets stand.

The Apple effect

Although Apple’s latest updates have pushed these assets, it does not mean the rallies are going to stick around.

It is worth mentioning that other companies such as Meta and Samsung have already launched their own VR headsets. Unfortunately, they have failed to create much excitement among the gaming communities.

A survey carried out in 2022 revealed that only 2% of the total steam gamers use VR headsets. Apple may have created ripples now but its impact may soon fade away.

As the users and investors come to their senses, they will start withdrawing and the MANA and SAND prices may plunge tremendously.

Metaverse Adoption Rate is Unimpressive

Just as the metaverse industry gained strong attraction in early 2021, it was Facebook that rebranded itself to Meta by the end of 2021.

It wanted to pursue a future in the metaverse but the major platforms, Decentraland, and The Sandbox have proven to flop in 2022.

The user influx on these projects has been very unimpressive, which gives the impression that the metaverse is not attractive as it is claimed to be.

Dilution Fears

Genesis, a firm that was once linked with the FTX exchange filed for bankruptcy in mid-January due to financial losses.

It shared its list of creditors and there was Decentraland there, to whom Genesis owes $55 million. This has increased fears that the project may face dilution due to the problem.

As for The Sandbox, there are problems involving the monthly unlocks. The project is finding it difficult to operate and may not be able to operate beyond Q3 2024 if the conditions do not get better.

If the situation does not fix, then the project may face a dilution.

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