The metaverse is fast becoming one of the focal points of Europe’s “Digital Decade”. On October 17th, Two European Union antitrust authority officers remarked that dominant metaverse companies could make it harder for users to choose, especially due to the potential of hiked prices.
Web3 token prices were negatively impacted by the news, with popular tokens like Decentraland (MANA), ApeCoin (APE), Axie Infinity (AXIE), and The Sandbox (SAND) seeing sharp price declines of more than 5% from the previous week. Over the last seven days, APE has decreased in value by 9.92%, MANA by 7.31%, and SAND by 7.71%, while the price of AXIE plunged more than 20%.
The metaverse could be the newest battleground in the long-running antitrust fight against big tech companies that hurt consumers. The EU is therefore trying to come up with its own way of handling online virtual realms in which people can meet, make friends, and do business via avatars.
Concerns That “Big Tech” Web 3.0 Could Hurt Consumers
Policymakers are worried that Meta, previously known as Facebook, could try to build a “walled garden” which users may not find so easy to leave.
Friedrich Wenzel Bulst and Sophie De Vinck of the European Commission’s antitrust unit highlight that a big company that creates a closed ecosystem “may constrain its consumers, business partners, and competitors in numerous ways.”
They explain that, as a result, users would have no choice but to buy the company’s products, despite the bloated priced of those products and the company’s abuse of their private information.
Web 3.0 Token Prices React
The token prices of many of the leading metaverse projects, including BAYC, Decentraland, The Sandbox, and Axie Infinity, dropped sharply in reaction to the news.
The APE ERC-20 governance and utility token fell almost 10% over the last days, falling through the $4.58 resistance level. APE is trading at $4.09 at the time of writing, and has shed more than 89% of its all-time high value. This price drop can be attributed to a number of factors, including reports that the SEC is investigating whether or not Yuga Labs‘ Bored Ape Yacht Club NFT collection and the ApeCoin token should be considered unregistered securities.
Bored-Ape Creator Yuga Labs Faces SEC Probe— Gᴇʀᴀʀᴅ Bᴀʀʀʏ (@gtbarry) October 12, 2022
The SEC is examining whether nonfungible tokens from the Miami-based company are more akin to stocks and should follow the same disclosure rules#BAYC #boredapes #yugalabs #NFT #SEC #apecoin #web3 #fintechhttps://t.co/QhP3SiKvYv pic.twitter.com/xraW1Evm9k
The price of Decentraland (MANA) also broke the $0.75 horizontal support mark during its descent, and may yet suffer further losses to as low as $0.49. Although the token’s price action has been relatively stable in the channel’s upper region, no bullish signals have yet emerged. However, MANA’s weekly RSI is now below 50, invalidating any bullish divergence that may have been present.
Decentraland’s price is expected to experience additional drops as a result, with its next long-term support level set at $0.49. At the time of writing, MANA is down just under 7.31% over the last week, trading at $0.615 at press time.
Over the course of the past week, the price of SAND, a digital asset that utilized in metaverse gaming platform The Sandbox, has declined. The price of the Web 3.0 token decreased almost 8% over the course of the past week, and is currently trading at $0.708. Experts project that the deficit may yet continue, with the next support resistance at $0.60.
Blockchain gaming token AXS has suffered perhaps the heaviest losses in the last seven days, as the Axie Infinity token depreciated by a whopping 21.8% to trade at $8.72 at the time of writing. Aside from the recent news, a combination of other factors contributed to the steep decline, including negative developments in the broader cryptocurrency market, which rippled to affect investor sentiment.
On the Flipside
- In brighter news, one Web 3.0 platform disclosed that developers are “more active than ever,” particularly on the Ethereum network, suggesting that they are unfazed by the recent decline in the value of cryptocurrencies across the board.
- During its third quarter report for 2022, submitted on October 13th, Web 3.0 development platform Alchemy predicted that 2022 would be the “biggest year yet” for developers in the nascent sector.
Why You Should Care
Web 3.0’s main focus is on putting control back into the hands of ordinary internet users. Critics of Web 2.0 infrastructure claim that large platforms like Google, Amazon, Meta, and Twitter wield excessive influence, and propose development of a Web 3.0, decentralized internet as a solution.
Read more on metaverse regulations:
Mexico Regulates Advertising in the Metaverse
Find out more about the craziest metaverse professions:
5 Metaverse Professions You Didn’t Know Existed in 2022