Crypto Chronicle with NewsCrypto
Welcome to another edition of Crypto Chronicles!
Today we are going to analyze what’s going to happen once FTX starts selling their assets to recover the creditors’ money. And if it worth hopping on the Web3 gaming bandwagon.
Here's what we got on the menu today:
1. FTX's Asset Sale
2. The Highs and Lows of Web3 Gaming
3. Funny meme
FTX's Asset Sale
The bulk of the assets, nearly $700 million, comes from FTX’s stakes in various trusts issued by Grayscale Investments, primarily the Grayscale Bitcoin Trust. Additionally, FTX holds assets in custody service provider Bitwise, valued at $66 million. The total value of these assets was initially pegged at $744 million as of October 25, 2023, but like a well-aged wine, their value has increased.
The Court's Green Light
On November 29, a Delaware bankruptcy court gave the green light to FTX to proceed with the sale. This decision came nearly four weeks after FTX debtors filed a motion requesting the sale of six cryptocurrency trusts, including GBTC and the Grayscale Ethereum Trust.
The Numbers Game
FTX currently owns over 22 million units of GBTC, now worth $691 million, and 6.3 million shares of ETHE, valued at around $106 million. The sale of these assets is akin to a garage sale, but instead of old furniture and forgotten paintings, we're talking about digital assets.
The Recovery Effort
Since the collapse of Sam Bankman-Fried’s crypto empire in November 2022, FTX’s administrators, led by John J. Ray III, have been on a mission to recover assets. So far, they've managed to claw back around $7 billion, with nearly half coming from cryptocurrencies.
This sales won’t crash the market because most of it is trust holdings and won’t be sold on the open market. FTX holds a lot of locked $SOL, more than $1 billion, which it won’t be able to sell for quite a while and even then it won’t be a market sell of everything at once because it wouldn’t be beneficial to anybody. Not to FTX, not to the creditors or the crypto market as a whole.
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The Highs and Lows of Web3 Gaming
The CoinGecko study reveals a statistic: over 75% of blockchain games launched in the last five years have failed. Out of 2,817 games released between 2018 and 2023, only 690 have managed to maintain a somewhat active player base. The study defines a "failed" Web3 game as one where the 14-day moving average number of active users drops by 99% or more from its peak.
The year 2021 was a golden era for blockchain game launches, with a whopping 738 games hitting the market. However, 2022, marked by major crypto collapses ($LUNA💭), saw the highest number of games fizzling out, with 742 failing in a single year. This puts the average failure rate of Web3 games at around 80% for any given year since 2018. It seems that in the world of Web3 gaming the odds of survival are low but it’s as bad as in the “Web2” world. Some could make an argument it’s better because there is only ≈2% of indie Web2 games that generate enough revenue to fund a second project.
Bull Markets vs. Bear Markets
Interestingly, CoinGecko's study notes that years with lower failure rates tended to coincide with bull markets, while higher failure years aligned with the onset of bear market cycles. It's a classic case of “when the going gets tough, the tough get going”, and unfortunately, many Web3 games couldn't keep pace.
The Survivors and the New Hope
Despite the grim statistics, some games have stood the test of time. CryptoKitties, one of the first Web3 games to gain hype in late 2017, has seen its adoption wane, but others like Decentraland, The Sandbox, and Axie Infinity continue to thrive. In 2023, Alien Worlds, Splinterlands, and Planet IX had the highest average unique active wallets, indicating a glimmer of hope for the industry.
The Future of Web3 Gaming
While 2022 had the highest number of failed games, 2023 has shown a slowdown in this trend, with only 507 failed projects as of late November. This could indicate a stabilization in the state of Web3 gaming, suggesting that the industry might be learning from its past mistakes and gearing up for a more sustainable future or it’s just a consequence of the crypto market going up.
Despite everything gaming sector has been gaining traction and if you are in it just for the money it may be a good bet on the hype. Some of the major Web3 games have released dates set for 2024 and they might be the ones that pump the most but if the game won’t be good it will be “sell the news” event.