Is Zuckerberg’s $100 billion metaverse experiment doomed to failure?

by · October 28, 2022

Not everyone is convinced that Mark Zuckerberg’s massive metaverse experiment is a good idea. Since Facebook was renamed Meta in 2021, the social media giant’s focus has increasingly shifted to connecting the digital and physical worlds through augmented reality. However, a shareholder in the company recently issued a letter to the CEO calling the metaverse investment “super large and terrifying.”

It didn’t take long for these concerns to be justified. Meta released its third-quarter financial results after midnight on October 26, and perhaps unsurprisingly, the metaverse division underperformed. Meta’s Reality Labs lost a whopping $3.672 billion during the quarter, mirroring a similar decline in Q1. That’s the risk you run when you venture into unknown territory. Despite all the hype surrounding the metaverse, these new social worlds remain largely empty. Will Meta fill the void? Only time will tell.

This week’s Crypto Biz chronicles Meta’s metaverse experiment, Tesla’s Bitcoin (BTC) holdings, and the sudden surge in Reddit’s collection of non-fungible tokens (NFTs).

Tesla’s Bitcoin Losses Rise to $170 Million in the First 9 Months of 2022

While Tesla’s foray into Bitcoin was initially praised by the crypto community, the whole ordeal has been a far bigger distraction for the electric car maker. In the second quarter, Elon Musk’s company sold 75% of its remaining Bitcoin holdings, adding roughly $936 million to its balance sheet. At the end of Q3, Tesla’s remaining BTC had an unrealized loss of $170 million, according to a new disclosure filed with the United States Securities and Exchange Commission. However, the company’s net loss from BTC isn’t too bad, given that Tesla had realized $64 million in profit during its previous sale. After all, Musk turned out to have paper hands.

CashApp adds support for the Bitcoin Lightning Network

Cash App users will soon be able to send BTC to each other through the Lightning Network, the highly touted layer-2 payment protocol that should make Bitcoin transactions faster and more scalable. To be clear, Cash App already supports Bitcoin transactions on Lightning in a limited capacity through QR codes. Now the popular mobile app will give users the ability to send $999 worth of BTC every seven days. The catch is that the service is only available to residents of the United States, excluding New York. Although estimates vary, Cash App is said to have approximately 80 million users. Imagine this demographic shopping regularly on Lightning one day.

Reddit NFT trading volume has reached an all-time high with wallet holders nearing 3 million

The crypto winter has been particularly harsh on NFTs — a once-booming market whose trading volume has plummeted over the past year. But for the social media platform Reddit, NFT interest seems to be increasing. Data from Polygon and Dune Analytics revealed this week that the trading volume of Reddit’s NFT avatars exceeded $1.5 million over a 24-hour period, bringing the collection’s cumulative volumes to $4.1 million. Since Reddit launched its collection in July, more than 2.9 million collectible avatars have been minted. You’re going to love the computer crash in this story.

Zuckerberg’s $100 billion metaverse gamble is ‘super big and terrifying’ – Shareholder

Some of Meta’s own shareholders are growing weary of its metaverse gambit – and the colossal price tag behind it. Altimeter Capital CEO Brad Gerstner wrote a letter to Mark Zuckerberg, urging the company to cut its annual metaverse investment budget from $10-15 billion to $5 billion. He called the hyper-fixation on metaverse technology “super large and terrifying.” Altimeter Capital owns a 0.11% stake in Meta, so Zuckerberg is unlikely to heed the warning. But a $10 billion annual investment from Meta translates into $100 billion in 10 years on a concept that Gerstner says is far from proven.

Before You Go: Why Are Bitcoin Whales Accumulating?

Has Bitcoin reached its definitive bottom for this cycle, or is there room for a final capitulation? This question has divided the Bitcoin community, which continues to predict a major breakout in the coming weeks. However, for dedicated hodlers, the timing of the bottom will not matter in the long run. While retail was busy selling below $20,000 BTC, the whales have been quietly accumulating. In the latest episode of Market Report, Cointelegraph’s analysts discuss why Bitcoin whales have piled up and what it could mean for the market in the near term. You can watch the full replay below.

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