Wall Street has never seen anything like Meta’s stock crash on Thursday.
After a shockingly bad earnings report Wednesday, more than $250 billion was wiped off Meta’s market value as its shares plunged 27%. It’s by far the biggest single-day drop in value in the US stock market’s history.
And it brought just about everyone else down with it.
Tech stocks dragged the Nasdaq down 3.7%. The S&P 500, the broadest measure of the US stock market, fell 2.4%. The Dow fared only slightly better, trading down 1.5%. (That’s still a nearly-520 point drop), all thanks to Meta.
Meta’s problems are enormous
Facebook’s daily users — 1.93 billion — are on a sharp decline with attention moving to other platforms like TikTok. And that’s hurting Facebook’s advertising business which makes up about 99.5% of its total revenue.
Mark Zuckerberg has so far failed to rip off TikTok from a rival to make a copycat. All he has succeeded in is introducing Reels which is mostly just recycled TikToks.
Meta is pumping lots of cash into the Metaverse, which will likely take 10 years to play out, and even Mark Zuckerberg has admitted that the “path ahead is not yet perfectly defined.”
Late last year, the company changed its name from Facebook to signal its plans to focus on the Metaverse. It seems, however, that Meta’s struggle with its decentralized competitors in the Metaverse space has done nothing but drag down its share price.
Metaverse tokens rise on Meta’s demise
While some may expect all metaverse-related investments to perform similarly, quite the opposite is happening.
What’s more, 10 Metaverse tokens hold most of the sector’s trading volume. A recent analysis shows them accounting for $18.67 billion of the $26.3 billion sector in the past week.
Metaverse tokens like MANA and SAND have experienced some very healthy growth.
Decentraland, a Metaverse platform built on Ethereum, has seen the price of its token MANA increase by over 20% in the past seven days. The token surged from a seven-day low of $2.19 to recent support levels around the $2.60 mark.
Likewise, SAND tokens for The Sandbox, one of Decentraland’s main Metaverse competitors, have seen a seven-day gain of 17.5%. Entering the weekend at a low of $3.31 before surging to a high of over $4, SAND is now seeing support levels around $3.60.
Facebook’s Metaverse was once feared to have the potential to push out decentralized Metaverse competitors. This unsavory prospect, however, seems less likely after Meta’s poor performance. The general belief in blockchain Metaverses has now grown even bigger than ever.
From the look of things, Meta’s Metaverse will be both centralized and built around extracting and gathering user data with the aim of proving a hefty revenue stream for the tech giant.
Meanwhile, users will begin to see the merits of Meta’s decentralized counterparts – especially with regards to ownership and control.
With major partnerships continuously being announced and exciting new Metaverse projects popping up, it seems that 2022 could be a big year for cryptocurrency-oriented virtual worlds.
