Published on: 11/08/2022
Blockchain games defy bear market, cryptos show signs of recovery
Amid market uncertainties and the low performance of cryptocurrencies earlier this year, blockchain games are showing signs of recovery following a $300 million market value raised in July, as well as millions in Unique Active Wallets or UAWs daily, as per DappRadar.
This healthy growth was due to the total amount of gaming transactions made in the market, which accounts for the largest compared to any other market. The general number reported in July sat at $807 million — six percent of which were from June, while 41 percent were from the last 12 months. Investments from venture capital firms such as Andreessen Horowitz, who dedicated a $600 million fund in May to online games, also play a part, as most of these games have entered the metaverse and used blockchain technology.
Aside from blockchain games, the entire digital asset market benefited from the slow recovery of the crypto market, which grew by 17 percent in July after months of bearish price action. Arguably, the rise of Bitcoin (BTC), Ethereum (ETH), and other prominent cryptos is setting forth a breath of fresh air for investors in the wake of the July crypto winter.
Growth in blockchain games
Trailing close in the second position behind blockchain games is DeFi. The sector has recorded decent yet far from stellar growth. DeFi is currently at $51 million fresh off its 33 percent month-over-month and 61 percent lower than in the previous 12 months.
Blockchain games such as Alien Worlds and Axie Infinity remains the market’s best-performing titles. Alien Worlds has the most UAWs of 205,285 and has grown by eight percent since June. Meanwhile, Sky Mavis’ Axie, who is still recovering after the $650 million Ronin Bridge Hack in May, made $207 million in revenue in July and has witnessed over four times trading volume compared to any other NFT project, as per Token Terminal. Axie even ranks higher than BTC, ETH as well as Binance Smart Coin (BSC).
“The game also generated more revenue than decentralized exchanges Uniswap, PancakeSwap, or lending protocol Aave. In July, Axie Infinity saw more than $200 million in revenue. Annualized, this would suggest Axie Infinity has the potential to see more than $2 billion in revenue during the coming year,” Crypto Briefing’s Nathan van der Heyden wrote.
Other than Alien Worlds and Axie, the sector’s growth can also be attributed to Wax, Splinterlands, and Hive. Gaming activity in Wax almost reached 50 percent, and the overall trajectory in Splinterlands suggests a relatively good growth. As for Hive, it built a positive UAWs count of 148,414 UAWs alongside an 8 percent month-over-month build.
Cryptos follow suit
The overall crypto market is recovering in July. While concerns remain about inflation and spiking interest rates of cryptos, BTC, ETH, and others bounced back as prices rose nearly 20 percent in July. After prices dropped to $17,708 in June, Bitcoin is trading for over $20,000 in August. Forbes’ Wayne Duggan reported that it was trading at around $24,000 entering this month.
Duggan noted that one of the reasons behind cryptos’ positive trajectory was mainly due to the Federal Open Market Committee’s decision to increase its federal fund’s target rate by 75 basis points in a bid “to combat forty-year highs in inflation”.
“Despite starting the week under plenty of pressure in the build-up to the decision, a sea of green is showing across digital assets since,” GlobalBlock digital asset broker analyst Ben Small said.
“You could argue this show of optimism reflects the view among investors that a more aggressive plan of action from the Federal Reserve was expected, particularly given the amount of political pressure that is building on governments to tackle inflation.”