This Week in the Metaverse: Crypto crashes and criminal Russian virtual casino
Things are moving fast in the metaverse, and in the wider world of Web3 as a whole. Depending on who you ask, this futuristic, blockchain-based space is either the next big thing for marketing — and for almost everything else — or an overhyped fad. Here’s what you need to know from this past week:
The crypto market took a historic dive earlier this week. (Credit: Adobe Stock)
Investors lose millions as crypto craters
Economic instability caused a historic crash in the cryptocurrency market earlier this week, producing huge dips in valuation for some of the top virtual currencies. On May 9, the value of Bitcoin — the world’s most popular cryptocurrency — dropped precipitously, causing 40% of holders to suddenly lose all of their investments in the currency, per CNBC. The values of other major coins — including ApeCoin, Solana, and Cardano — have also plunged. Luna, another popular coin, experienced the greatest loss of all: a decrease in valuation of as much as 96%, according to some estimates. The crash of Bitcoin has pushed Coinbase, the most popular crypto trading platform in the U.S., to the brink of bankruptcy; approximately 20% of the platform’s user-base has already jumped ship in the wake of the crash. The huge dip was caused by broader economic forces: amid ongoing inflation, the Federal Reserve has been raising interest rates, leading to a sharp decrease in crypto investing, which has historically tended to be a risky endeavor. The past few days have caused diehard HODLers — a common acronym in the crypto world which stands for “Hold on for dear life” — to rethink their position. Meanwhile, staunch anti-crypto types like Warren Buffett (who once called Bitcoin “rat poison”) must be feeling vindicated.
Investigators crack down on virtual casino with alleged Russian ties
Regulators from five states — Texas, Wisconsin, Alabama, Kentucky and New Jersey — filed an emergency cease-and-desist order against an allegedly phony metaverse-based casino which they claim has ties to Russia. The 22-page order says that the virtual operation, called the Flamingo Casino Club, “is simply a high-tech scam.” The Flamingo Casino Club claimed to be affiliated with the famous Flamingo Las Vegas Hotel and Casino, which turned out to be false. The shadowy operators behind the virtual casino — whose profile pictures on the organization’s website are simply illustrations of flamingo heads — had also been telling users that a portion of the profits from its NFT sales would go directly to the people of Ukraine following that country’s invasion by Russia. This also turned out to be a lie: “I haven’t seen any money going to benefit Ukrainians,” one of the regulators told CNBC. After a months-long investigation, authorities discovered that the virtual casino’s operators had ties to Moscow, which heightened suspicion that the operation was trying to scam users.
Despite crypto crash, El Salvador is all in on Bitcoin
Amid one of the most dramatic economic downfalls in the history of cryptocurrency, El Salvador President Nayib Bukele is continuing to bet his country’s economy on Bitcoin. The gamble began back in September 2021, when El Salvador made headlines by becoming the first country in the world to adopt Bitcoin as a legal tender — El Salvadorans would, in other words, be allowed to use the cryptocurrency to pay for any and all goods and services within the country. Riding its way through some technical glitches, the country worked to make Chivo, its national wallet, available to the people of El Salvador. Many El Salvadorans initially downloaded the wallet to receive the payment that had been offered as a sign-up incentive, only to stop using it shortly thereafter. Now, as the global crypto market plunges violently and major cryptocurrencies — including Bitcoin — are being drained in value, throngs of El Salvadorans have been abandoning their country’s wallet en masse. President Bukele appears to be unfazed and more bullish than ever on crypto. On Monday, he announced on Twitter that “El Salvador just bought the dip,” meaning that his government had opted to take advantage of Bitcoin’s historically low price to purchase hundreds of coins in the belief that the price dip is a short-term anomaly and the coin’s value would soon climb again. According to the Twitter post, El Salvador purchased 500 Bitcoins, each at a value of approximately $30,744 — at a time when the country’s economy is being threatened by the potential for a national debt default. The next day, May 10, he took yet another step to demonstrate his unshaken belief in Bitcoin to the world: In yet another Twitter post, he unveiled a mock-up of his vision to build “Bitcoin City.” The image, shared by Bukele via Twitter this past Sunday, makes his dream city look like a crypto El Dorado, the entire landscape plated with gold (though he’s also hinted that he imagines the city being replete with trees and therefore mostly green), situated around a central hexagon, with a giant Bitcoin sitting squarely in the middle.
Orlando, Florida wants to be at the center of the metaverse
The Orlando Economic Partnership (OEP) announced plans to develop what it’s calling the MetaCenter, a virtual rendering of the Orlando metropolitan area designed to position Orlando as a hub of innovation in the burgeoning metaverse. “The Orlando region is home to next-gen gaming, entertainment, artificial intelligence, AR/VR, IoT and simulation training companies,” the OEP said in a press release. “The people, entrepreneurs and businesses here created the most engaging, technologically-advanced region in the world over several decades – and are now doing the same for the metaverse, making Orlando the MetaCenter.” Florida has flowered into a booming tech scene in recent years, with many entrepreneurs fleeing California at the height of the pandemic for cities like Orlando and Miami. According to Forbes, Orlando saw the second-greatest increase in tech jobs across all US cities in the wake of the pandemic (Houston claimed the top spot). According to the press release, the OEP will set out to build a digital twin of the entire Orlando metropolitan area, incorporating “new 3D technology to map out scenarios on everything from infrastructure to real estate to talent availability to climate change.”
Budweiser Zero and Dwayne Wade shoot their shot in the NFT market
Budweiser Zero, Budweiser’s flagship non-alcoholic beer, has announced a new NFT project launched in collaboration with NBA legend Dwayne Wade, who’s also a cofounder of Budweiser Zero. The collection, called “Budverse Legends: Dwayne Wade x Budweiser Zero Edition,” will drop on May 24. The NFTs will feature Wade’s likeness and an inspirational quote from the basketball icon. Each will be priced at $180 and will be sold across three tiers: core, hero, and legendary. Each tier will come with its own perks and prizes, including “a once in a lifetime in-real-life experience with Dwayne Wade” for legendary token holders. There’s also a philanthropic component: “Budweiser and Dwyane Wade are committed to leveraging their unique capabilities, relationships and reach to make a positive impact in the community,” Budweiser said in a statement. “Together, Budweiser and Wade have teamed up to donate net profits from the sale of the NFTs to create a grant program for minority-owned businesses in underserved communities across the US.”