As recession fears loom, speculative gaming and Metaverse tokens appear to be the first dropped from investors’ portfolios. STEPN, a move-to-earn gaming lifestyle app, has seen its GMT token plummet 25% over the past 24 hours. GMT is currently down 41% since it registered an all-time high of $4.11 less than eight days ago.
Popular GameFi and Metaverse projects have outpaced the market to the downside. Axie Infinity and ApeCoin are also clocking double-digit losses; could it be game over for gains with GameFi and Metaverse tokens?
STEPN’s GMT has been one of the best performing tokens in recent months, skyrocketing over 3000% since it launched at the beginning of March. Despite earlier defying the negative macroeconomic outlook that has weighed on the crypto market since the beginning of the year, GMT’s advance appears to have peaked.
Fears of an economic downturn appear to be at the root of yesterday’s dramatic decrease in inequities and crypto-assets. The drop appears to be related to the Bank of England’s Monetary Policy Committee’s prediction that inflation will hit 10% by the end of the year. The bank’s Governor, Andrew Bailey, stated that the current pattern represents a “sharp economic downturn,” putting the economy at risk of a recession.
In the United States, the Federal Reserve raised interest rates by 50 basis points on Wednesday to control inflation. Many worries that the previous 25 and 50-point hikes will not be enough to cool growing inflation, resulting in an increasingly uncertain economic outlook.
GameFi and Metaverse applications are some of the more speculative bets on the crypto market and thus are likely to be the first cut from investors’ portfolios during a downturn. It is unclear whether today’s decrease is a transient reaction to recession fears or the start of a longer-term downtrend in the crypto market.
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