Decentraland (MANA-USD) is slowly making a comeback, but the move may get more difficult in the future. As of April 9, MANA was at $2.34 and up 15.5% from its low of $2.026 on Jan. 22.
However, MANA is still 30% below its December 2021 year-end price of $3.345. So it has to rise 43% just to get back to par. That may not be as easy as in the past despite its high volatility.
That’s because Decentraland is a metaverse platform where users purchase plots of land they can later navigate, build upon and monetize. Prices of metaverse real estate may soften even as actual real estate starts to slump with higher interest rates.
Virtual land sales seem to be slowing down. There have been no major plots selling for millions of dollars recently as occurred in November 2021.
Moreover, AMBCrypto recently reported average land sales in Decentraland have fallen from $19.3 million in January to just $7.1 million in March. Moreover, the average price of land sold in the Decentraland metaverse has fallen to $7,100, the lowest in nine months.
Ironically, as interest rates rise in the U.S. and the price of actual real estate falls, this could lead to continued lower trends in Decentraland virtual real estate.
Moreover, as Cointelegraph recently pointed out, the idea of the metaverse is facing practical difficulties. Customers have resisted buying expensive and bulky virtual reality (VR) headsets and other hardware. Though introduced five years ago, Oculus headsets have not received mainstream adoption like smartphones, tablets or laptops.
As it stands, MANA is ranked as the 33rd largest crypto with a market capitalization of $4.3 billion, according to CoinMarketCap. Investors have yet to push it into the top 10 cryptocurrency list, even at its peak.
However, Decentraland could eventually make a comeback once this real estate cycle bottoms out. The problem is that could take at least a year to transpire.
On the date of publication, Mark R. Hake did not hold any position (either directly or indirectly) in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.