First Mover Asia: For the Metaverse to be a $13,000,000 opportunity, many things need to change; Bitcoin breaks above $31,000

Citi Report Makes Bold Predictions, But Major Metaverse Platforms Are Struggling to Attract Engaged Users; Altcoins are mixed.

Hi. Here’s what happens:

Price: A late surge took bitcoin above $31,000 where it started the week.

Insights: A Citi report puts the potential value of the metaverse at $13 trillion, but platforms are struggling to attract engaged users.

Technician’s Opinion: The price rallies were short-lived, indicating a loss in purchasing power.

Prices

Bitcoin (BTC): $31,285 -0.07%

Ether (ETH): $1,828 -1.5%

The Biggest Winners

attachment telex return DACS sector
chain link SHORTCUT +9.1% Calculate
gimbal ADA +1.2% Smart contract platform
XRP XRP +0.8% currency

The biggest losers

attachment telex return DACS sector
internet computer PCI −8.7% Calculate
Solana GROUND −7.4% Smart contract platform
Classic Ethereum ETC −4.0% Smart contract platform

Bitcoin late rises to revisit above $31,000

Bitcoin surged back above the $31,000 mark on Tuesday after a federal cryptocurrency law was introduced that would address a number of key regulatory issues plaguing the industry. Ether and other major digital assets also rose in the afternoon, regaining ground lost earlier in the week.

The largest cryptocurrency by market cap traded above $31,200, roughly unchanged over the past 24 hours, but up sharply from its temporary hover below $29,300 on US exchanges early Tuesday morning. Bitcoin was down late Monday and continued to trade in a choppy range amid widespread investor concerns about inflation, geopolitical unrest and the global economy.

Ether, the second largest cryptocurrency, is down more than 1% recently to trade just above $1,800. Other major altcoins were mixed with SOL over 7% but LINK surged over 8%. The mood remained pessimistic.

“Markets continue the long-term downtrend, but the recent cheap cryptocurrency law in the US offers near-term support as it suggests pushing out the unfortunately too-large ones [Securities and Exchange Commission] in terms of jurisdiction over crypto,” James Key, CEO of web protocol 3 Autonomy Network, told CoinDesk.

Stock markets, which have been oscillating over the past few days as investors digested some bullish treats as well as their recent regime of bad news, climbed Tuesday, with the Nasdaq, S&P 500 and Dow Jones Industrial Average all up more than half a percentage point.

However, investors had cause for concern on Tuesday. The World Bank lowered its forecast for global economic growth for 2022 to 2.9% from 4.1% in January. World Bank Group President David Malpass called the “risk” of stagflation “significant”. Later in the day, US Treasury Secretary Janet Yellen told the Senate Treasury Committee that she expected inflation to remain high. And less than three weeks after announcing disappointing first-quarter results, Target warned investors that its profits will collapse due to changing consumer behavior that has created imbalances in its inventory.

Many analysts expect the cryptocurrency bear market to worsen in the near term, and Key noted that previous Bitcoin bear cycles have bottomed after an 85% drop in value for at least 18 months. The current market has lost nearly 60% of its value since hitting an all-time high last November.

“I really doubt that’s the bottom,” Key said. “Moreover, these previous cycles have all been in a long-term bull market for stocks, although this is not the first time. As institutional investors reduce risk, “exotic” and risky assets like cryptocurrencies will be the first to sell, suggesting this period has the potential for a worse bear market. »

markets

S&P 500: 4,160 +0.9%

DJIA: 33,180 0.8%

Nasdaq: 12,175%

Gold: $1,851 +0.6%

knowledge

The Metaverse struggles to attract engaged users

A recent report by Citi calculated the total addressable market value of the metaverse at $13 trillion.

If it materializes, it would be an impressive feat considering the gaming market is worth just $180 billion, according to gaming research house NewZoo, and the PC gaming hardware market is just $5.7 billion. Dollar.

For the most part, the Metaverse Marketplace is just a smaller version of the Gaming Marketplace. Metaverse exchange-traded funds (ETFs) have lagged behind their gaming counterparts in the market with their exposure to publicly traded cryptocurrency companies — although they are mostly the same.

According to Citi, the $13 trillion comes from all “internet-related revenue down to the crowded-out activity in the physical world.” This makes massive assumptions about the future of ecommerce as it implies that all parts of the ecommerce stack will be disrupted by the metaverse.

This is almost in line with the optimistic augmented reality (AR) mentality of the late 2010s, which focused on mobile bias to disrupt many parts of the internet economy, from gaming to advertising.

But AR space couldn’t spawn useful unicorns. Blippar, a promising London-based startup that fused artificial intelligence (AI) and AR, went bankrupt in late 2018 after raising $37 million at a $1 billion valuation.

The app promised to revolutionize e-commerce by allowing users to point their phone at any object and get all the information the app could gather through visual recognition and online searches. It could also be used to provide advanced 3D visualizations of products that improve online selling opportunities for retailers. They were all very interesting and promising new revenue models, but the user base never materialized.

Aside from Blippar, Magic Leap, which released promising initial visuals it never could deliver, drained the life of AR capital markets from capital markets and robbed many promising AR startups of their funds to create this promised augmented reality. Despite the success of Pokemon Go, there simply hasn’t been another AR unicorn quite like this one.

Going back to Citi’s Metaverse forecasts, much like the bull market around AR in the late 2010s, is missing something: users. On-chain data shows that despite high ratings, Metaverse majors are struggling to build a user base, with some having a few thousand at most, compared to the tens of millions of players playing simultaneously on Steam or Xbox Live.

And it’s not because they’re new platforms: PC gaming network Steam hit 1.5 million concurrent users six years after launch; Decentraland currently has fewer than 1,200 active users and has been open to the public for two and a half years.

We still have a long way to go before the Metaverse becomes a $13 trillion opportunity.

technician’s opinion

Bitcoin daily chart shows support/resistance. (Damanick Dantes/CoinDesk, TradingView)

Bitcoin (BTC) remains in a choppy trading range as short-term indicators are neutral. The cryptocurrency might find support near $25,000 and $27,000 as its price continues to stabilize since last month’s sell-off.

BTC is down 4% in the last 24 hours.

The Relative Strength Index (RSI) on the daily chart has fallen back below the neutral 50 level, indicating weak momentum behind the recent price rallies above $30,000. On the weekly chart, the RSI is the most oversold since March 2020, which preceded a surge in cryptocurrency prices.

Nevertheless, the indicators can remain oversold for several weeks, especially in a downward price trend. This means that the upside potential for BTC could be limited, with immediate resistance at the 50-day moving average of $33,371.

Important events

1:00 p.m. HKT/SGT (5:00 a.m. UTC): Japan Eco-Watchers’ News/Outlook Survey (May)

5pm HKT/SGT (9am UTC): Eurostat Employment Trends (QoQ/YoY/Q1)

The CoinDesk Consensus Convention begins on June 9th and lasts for three days. Here you will find the agenda and the list of speakers.

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