NFTs and the metaverse sectors have seen “China-like growth,” Animoca Brands’ Yat Siu says
An explosion in demand for NFTs and growth in the metaverse sector has seen digital assets such as Axie Infinity (AXS), Decentraland (MANA), and The Sandbox (SAND) soar.
Animoca Brands’ Yat Siu says the sector has seen “China-like growth” but believes investors must brace for a short term slowdown
Yat Siu, the co-founder and chairman of Hong Kong-based gaming firm Animoca Brands, says the digital asset space is facing potential “bumbs in the road” following an explosive growth trajectory over the past year.
Siu says there’s still a lot of demand for assets in the non-fungible token (NFT) and metaverse sectors, with investors eyeing gains likely attracted by recent profits for some of the leading digital assets linked to virtual worlds.
But while he thinks the industry remains locked on long-term growth, the outlook in the short term might not be so great for investors.
Speaking at a Reuters panel on the metaverse on 30 October, the Animoca Brands chairman noted that it’s not just crypto or the NFT space that faces a tricky outlook in the short term. According to him, the forecast that markets are likely to hit rough terrain also applies to the broader financial market.
Siu compares the growth within the metaverse space to China’s explosive economic growth over the past 30 years.
He says people might not see the comparison, but all the factors that supported that kind of growth are there. In this, he points to increased demand as compared to China’s population growth, and broader adoption across crypto to the rapid industrial expansion in the country.
Siu says that long term, investors are likely to be fine but would need to take a cautious approach short term.
“The metaverse is the equivalent [comparable to China’s growth],” he said at the Reuters Next Conference.
Data from CoinGecko shows that the total NFT market cap currently stands around $66.8 billion, with the valuation seeing a 1.3% downside over the past 24 hours. The metaverse sector has a market cap of $36 billion, about 3% down on the day.
But despite the slowdown, NFTs and metaverse linked tokens have had a staggering 2021, with mega price moves for tokens like Axie Infinity, Decentraland, and The Sandbox.
NFTs sales have fetched crazy prices in the marketplace too, hitting over $10 billion in the third quarter alone. The space is expected to grow even further as creations and virtual property continue to sell for millions of dollars.