GameFi and Metaverse tokens are the most affected by the market slowdown

Key points to remember

  • Several play tokens and Metaverse suffered significant losses on Friday.
  • Move-to-Earn gaming lifestyle app STEPN saw its GMT token fall 27%.
  • Axie Infinity and ApeCoin also reported double-digit losses as fears of recession weigh on the broader crypto market.

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Popular GameFi and Metaverse projects outperformed the market. STEPN’s GMT token saw a 27% drop on the day that Axie Infinity and ApeCoin also had double-digit losses.

Crypto games in free fall

The game can be over for winnings with GameFi and Metaverse tokens.

Several gaming tokens and Metaverse suffered significant losses on Friday as the broader crypto market declined. STEPN, a lifestyle app for mobile gaming, has seen its GMT token drop by 27% in the last 24 hours. GMT is currently down 41% since reaching a record high of $ 4.11 less than eight days ago.

diagram 2
GMT / USD chart. Source: CoinGecko

STEPN’s GMT has been one of the best performing tokens in recent months, rising over 3,000% since its launch in early March. Despite past defiance of the dismal macro outlook that has plagued the crypto market since the start of the year, it looks like GMT’s rally is running out of steam.

Elsewhere, other gaming chips also feel the pain. Play to earn game Axie Infinity extended its previous losses, with its AXS token falling another 16% today. The game has been struggling with a declining player base for several months as the amount of money that players can earn from playing the game has dropped drastically. To make matters worse, Axie Infinity’s Ronin Chain Bridge suffered a $ 550 million hack at the end of March, adding further downward pressure on the price of the AXS token. Axie Infinity’s flagship token is currently down 83% from the high of $ 164.90 reached on November 6.

diagram 3
AXS / USD chart. Source: CoinGecko

ApeCoin is a new player in the crypto-gaming and metaverse scene, and is also one of today’s biggest losers. APE, which was required to participate in Yuga Labs’ Otherside Metaverse terrestrial airdrop, reached a record high of $ 26.70 just over a week ago when NFT collectors filled up. After the fall, however, demand for APE appears to have dried up. ApeCoin has fallen 17.5% in the last 24 hours as weakness in the crypto market exacerbated its previous losses.

Fears of an economic recession appear to be behind yesterday’s sharp decline in equities and cryptocurrencies. The decline appears to be linked to forecasts by the Bank of England’s Monetary Policy Committee that inflation will hit 10% by the end of the year. Bank director Andrew Bailey said the current trend marks a “significant economic downturn” that puts the economy at risk of a full-blown recession.

In the US, the Federal Reserve continued its plan to raise interest rates to fight inflation on Wednesday with a 50 basis point increase. However, many fear that previous increases of 25 and 50 points will not be enough to curb rising inflation, leading to increasingly uncertain economic prospects.

As GameFi and Metaverse apps currently derive much of their value from speculation about what they might achieve in the future, they are often the first to be dropped from investors’ wallets during downturns. It is not yet clear whether today’s fall is a temporary response to recession fears or the start of a more prolonged downward trend in the crypto market.

Disclosure: At the time of writing this author, the author owned ETH and several other cryptocurrencies.

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