According to billionaire investor Mark Cuban, buying digital land in the metaverse may not be the best use of your money.
Although Cuban is a well-documented cryptocurrency enthusiast, he called buying virtual real estate on Metaverse “the dumbest s— ever” in a recent interview on Altcoin Daily’s YouTube channel.
Despite being an investor in Yuga Labs, which owns popular NFT collections such as Bored Up Yacht Club, Cuban, who has sold digital land plots, says buying virtual real estate is “stupid.”
“It was great money for them, but that wasn’t utility-based,” he said.
In the physical world, real estate is valuable because land is a scarce resource. However, that lack doesn’t necessarily apply to the Metaverse.
In these virtual worlds, “there are unlimited volumes you can create,” Cuban said during the interview.
The rise and fall of digital real estate
Metaverse platforms experienced a virtual land rush last year as users collectively spent millions on digital real estate. Combined sales across the four major platforms will reach $501 million by 2021, according to Metametric Solutions.
In some cases, virtual real estate has gone as far as a physical home. Republic Realm, an investment firm that owns and develops virtual real estate, has dropped $4.3 million on digital assets in The Sandbox, one of the largest Metaverse platforms, the Wall Street Journal reported.
A virtual plot adjacent to Snoop Dogg’s digital home in the Sandbox was purchased in 2021 by an NFT collector named “P-Ape” for $450,000.
However, the virtual housing bubble may have popped.
As of Aug. 7, the average sale price of a virtual property on the Metaverse platform Decentraland was $14,385.27, according to WeMeta. That’s a 61% drop from the peak average sales price in November 2021, the site says.
Given the unpredictable nature of cryptocurrency and cryptocurrency, financial advisors recommend investing only as much money as you are prepared to lose. There are no guarantees that you will make a profit on your investment.
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