What Happened to NFT and Metaverse Land Buyers?

The era when NFTs were selling for millions of dollars and the rush for Metaverse land dominated headlines is not so distant. This quickly inflated market crashed hard with the crypto downturn, leaving behind nearly zeroed-out figures for most investors behind the colorful avatars and parcel maps we saw on screens. So, what exactly happened during this process, what did people really pay for, what does the current picture look like, and what direction is expected for the future?

The Rise of the NFT and Metaverse Bubble

NFTs (Non-Fungible Tokens) emerged as a unique digital identifier recorded on a blockchain. The main claim was to verify the ownership of a digital work or asset through this record. In 2021, significant sales echoed through the digital art world, with some NFTs fetching tens of millions of dollars. These sales brought the NFT market to the attention of both mainstream media and small investors. In a short time, profile picture collections, in-game assets, digital cards, and various artworks began to be traded in NFT format.

Profile picture collections became a status symbol, especially with the participation of celebrities and social media influencers. They were marketed with advantages like entering a community and gaining access to closed groups, further driving up demand.

In the same period, the Metaverse concept also experienced a rapid rise. Parcels were defined on maps in virtual worlds like Decentraland and The Sandbox and sold as virtual land recorded on the blockchain. The total sales volume on these platforms reached hundreds of millions of dollars in a short period. The average land prices became comparable to the per-square-meter prices of some real-world cities.

The adoption of the Metaverse narrative by large technology companies further amplified this wave. Facebook’s name change to Meta, its enormous-budget virtual reality investments, promotional videos, and events made this area seem like an unmissable opportunity for small investors. Combined with the increased digitalization during the pandemic, the work-from-home setup, and easy financing conditions, NFT and Metaverse land quickly became a narrative of easy wealth.

What Was Actually Paid For?

In most cases, the person who purchased an NFT bought the blockchain record pointing to the artwork, not the artwork itself. Technically, the NFT functioned as a unique identifier pointing to a digital file, rather than the digital file itself. In many projects, the visual, video, or file was stored on separate servers outside the blockchain. In this case, the NFT practically became a record and connection information.

A similar structure emerged with Metaverse land. Users purchased the right to use parcels with specific coordinates on a virtual map. This right was dependent on the platform’s own smart contract and the software infrastructure maintained by the team managing that platform. In other words, what was purchased was not independent property in the classic sense, but a data record defined within a specific software.

From a legal perspective, these assets remained completely different from real estate subject to deeds. They had no counterpart in state deed systems, nor were they linked to official zoning plans or real estate law. The value was largely based on expectation, the narrative of limited supply, community effect, and marketing campaigns.

The Market Collapse

Starting in 2022, a sharp pullback in cryptocurrencies began as global interest rates rose and risk appetite declined. This drop in the crypto market directly hit the NFT market. Transaction volumes quickly fell significantly from peak levels. Daily buying and selling first slowed down and then nearly stalled for many collections.

Market data shows that NFT transaction volume has fallen by over 90% compared to its peak period. The trading volume in the art-focused NFT category dropped from billions of dollars to less than a hundred million. Many collections started spending months with only a few transactions. Prices declined sharply, liquidity was lost, and finding buyers became difficult.

Extensive analysis reveals that the market value of the vast majority of tens of thousands of NFT collections has fallen to effectively zero. Most of these collections find no buyers and remain listed in the open market. The same studies showed that a significant portion of the total trading volume in some collections consisted of artificial buy-sell transactions (wash trading). That is, some of the volume came not from real user demand, but from transactions made to inflate the price.

The picture similarly deteriorated for Metaverse land. Virtual land prices in many projects declined by an average of over 70% compared to their peak period. In some popular platforms, the lowest-priced parcels lost up to 90% of their value compared to their 2021 levels. Parcels that were once priced at tens of thousands of dollars dropped to a few hundred dollars.

The pullback also began on the corporate side. Some large companies closed or significantly downsized their Metaverse-focused units. Major tech firms shifted their Metaverse presentations toward more general virtual and mixed reality visions. Investor pressure and balance sheets showing losses led to a contraction of budgets allocated to this area.

What Happened to NFT and Metaverse Land Buyers?

Looking back today, those who bought NFT and Metaverse land can be categorized into a few groups. The first group is a limited segment who entered the market very early and were able to sell during the boom. These individuals made high profits in the initial wave and left NFTs behind as a past speculative move.

The second and largest group consists of investors holding assets whose value has been largely lost. Various studies show that the economic value of a very large portion of NFT collections has virtually dropped to zero, and most of these assets cannot find buyers. For these investors, the NFTs in their wallets have become digital souvenirs reminding them of the high commissions paid and the excitement of those days.

A similar scenario exists in the Metaverse land sector. A significant portion of the parcels purchased for tens of thousands of dollars on platforms like Sandbox are now waiting for buyers at a small fraction of their previous value.

Some projects, such as concert venues, exhibition halls, and stores, were attempted on the land. However, user traffic and revenue potential remained far below the initial projections. Some investors are holding onto the land, waiting for renewed interest in the future, while others have completely stopped checking their wallets.

A third group continues to use NFTs as profile pictures and community tickets. Owners of some large collections are trying to generate meaning through brand value and community events, despite the falling prices. Nevertheless, even these collections have seen a significant loss in value compared to their peak period, and liquidity remains limited on the buyer’s side.

What Will Happen to NFT and the Metaverse in the Future?

The current picture shows that the NFT and Metaverse story of 2021 and 2022 was largely a speculation-driven wave. This technology was presented in a short time with ambitious titles like the internet’s new deed and the future of the real estate market. However, the legal framework, technical infrastructure, and everyday usable applications did not develop at the same speed.

Moving forward, the NFT concept is expected to move away from the meaning of astronomically priced digital visuals and gravitate towards narrower but more functional areas. Tracking in-game assets, tickets, membership cards, certificates, and some digital documents on the blockchain could turn NFTs into an infrastructure technology rather than a direct investment tool. In an environment where regulatory bodies draw a clear framework and fraud decreases, it may continue to be used as a backend recording system.

In the Metaverse sector, instead of a general universe idea where everything moves to a single giant virtual world, virtual environments focused on specific purposes may come to the fore. The Metaverse concept may survive by changing its name or simplifying in areas like virtual offices for business meetings, mixed reality applications for training and simulation purposes, and 3D environments used in industrial design and testing processes.

However, for models focused on land trading whose value is largely based on expectation to return to their former volume, both user habits and the technical framework need to fundamentally change. This is not considered likely in the near future.

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