As the United States enjoyed an extended long weekend, the start of the trading day in Asia witnessed a subdued market. Bitcoin experienced a 1.1% decline, settling at $30,807, while ether also dipped 0.8% to $1,939. The CoinDesk Market Index (CMI), which gauges a temporary Bitcoin dominance reported a 0.9% decrease, reaching 1,262.
Decreased Trading Volume Impacts Crypto Exchanges
CoinGlass data indicates a decline in trading volume across major exchanges, with decreases ranging between 15% to 20%. While open interest remains stable at approximately $14.38 billion, liquidation volumes have also diminished, with only $148,000 in positions liquidated over the last four hours and $7.2 million in the last 12 hours.
CoinGlass’ long/short ratio suggests a slight advantage for long traders. However, the sentiment among traders appears mixed, as a substantial group of neutral traders exists alongside the bullish and bearish camps.
GameFi Industry Addresses Ponzi Scheme Perception
During an interview at the Collision web conference in Toronto, Yat Siu, co-founder and executive chairman of Animoca Brands, defended the GameFi industry against accusations of being a Ponzi scheme. Siu stated that the perception of GameFi as a Ponzi scheme is primarily an American narrative, asserting that in Asia and the Middle East, such claims are unheard of due to a misunderstanding of the essence of GameFi.
While acknowledging the existing economies of scale within games, Siu emphasized that GameFi aims to promote financial transparency rather than solely creating financial value. However, critics argue that GameFi’s “Play to Earn” model relies on a wealth transfer between players, resembling a Ponzi scheme rather than fostering genuine gameplay engagement.
Concerns over Unrealistic Returns in GameFi Industry
Vader Research, a Web3 gaming market research firm, highlighted the problem of unrealistic returns offered by some GameFi projects, which it believes jeopardizes long-term crypto adoption and hinders genuine Web3 gaming growth. The recent performance of certain GameFi platforms supports this argument, as Axie Infinity witnessed a 55% decline in its AXS token value over the past year, accompanied by a significant decrease in the number of players.
Animoca Brands, known for its involvement in the GameFi sector, experienced an 18% decline in its basket of tokens over the last six months. In contrast, other investors have seen substantial gains during the same period, benefiting from the mini-bull market of 2023 and the broader growth of the crypto market over the long term.
The Future Challenges: Is Now a Good Time to Buy Bitcoin?
As the industry confronts the challenges of perception and sustainability, the question of aligning with research that addresses Ponzi-like characteristics becomes crucial for the future of the GameFi sector.
In conclusion, Bitcoin dominance holds above $30.5K despite a quiet trading period during the U.S. long weekend. The GameFi industry continues to combat the perception of being associated with Ponzi schemes, with varying opinions on the nature of GameFi’s financial aspects. The industry must address concerns about unrealistic returns and ensure long-term viability while striving for genuine engagement in Web3 gaming.
