The market has taken a hammering. If you’ve been hanging around crypto for a while, you already know the score: these are the times when strong stomachs are tested, and huge opportunities are on offer.
This is why we decided to check in with Hustle, to find out how current market conditions might affect crypto gaming (and what opportunities it might provide).
As usual, he pulled through.
- Play-to-earn gaming is the ultimate market hedge
- Bear-trends attract massive inflows of users
- Users lead price action
- Fundamentals keep users (and communities!) active
Hustle tweeted the below this weekend. Let’s unpack it.
I know what AXS did last summer
Rewind to June 2022, when the market was reeling from a brutal correction.
In the midst of all that panic and uncertainty, something incredible happened: Axie Infinity (AXS) went on one of the most staggering runs in recent memory.
Nothing happens in a vacuum, and this insane rally (2,124%!) was no freak event. Crucially, AXS didn’t go parabolic in spite of, but rather as a result of, the bearish market conditions.
Gamers don’t care about Bitcoin
Hard as it might be to believe, gamers don’t care about whether Bitcoin is above or below the 200-day moving average. They certainly don’t care whether FTM has flipped Solana in TVL. They’re here to game, irrespective of market conditions. And many of them are doing it to pay the bills.
That’s the beauty of blockchain-based gaming: at its best, it empowers players (through innovative play-to-earn economies) to monetize their activity, regardless of any factors outside their control.
How Axie bucked the market trend, and why the price exploded
Just check out this historical activity chart for Axie Infinity.
The number of users began a parabolic ascent around June 2021, while the rest of the market was in the midst of disaster.
Coincidence? Quite the opposite. It’s precisely because play-to-earn gaming is the least risky way to stack your favorite gaming currency that players increase their activity when the market is down. Think of it as a pivot away from nightmarish market conditions, into an economy that functions with or without Bitcoin!
Here’s the cool thing: If we compare the price of AXS with the game’s growth in users, we see that the charts align almost perfectly – right until the most recent market dump. Here’s a side by side comparison.
You know what’s even cooler? The user growth (orange line) has begun moving up again, just as the market is trending down!
Next Axie on the horizon?
So, that’s the thesis: A downtrending market invites an uptick in user activity. But what can we do with this information?
First, let’s see if the pattern is repeating elsewhere. After all, there’s a difference between an isolated example and an emerging pattern; multiple data points signify a trend.
Hustle points to another game following suit: Play-to-earn horse racing platform Pegaxy (PGX) is following an almost identical trend to Axie Infinity.
PGX up 47% on the week, while the rest of the market is dumping. And again, notice the uncanny similarity between the growth of users and positive price action. The charts line up too well!
We talk about relative strength, but certain play-to-earn projects will have brute strength against the rest of the market when it reverses to the upside. And the fruits of their rewards will be even sweeter!
Data doesn’t lie: how to spot the next big thing
Remember, price is a lagging indicator – it follows the user count. If you’re looking to find those play-to-earn projects likely to thrive in a bear trend, see where the players are flowing. Then ask if the price is reacting. At that point, your job is to figure out why.
Pegaxy isn’t attracting such numbers for no reason: it’s all backed by rock-solid fundamentals. The game has taken some of Axie Infinity’s best features – breeding, renting, as well as two-token economics (PGX/VIS vs AXS/SLP) – and developed them even further. It has what many consider to be the best built-in rental system in the space, a thriving scholarship system, and a wide array of possible income streams for players: Users can rent out horses, scholars can race them (for free), and both parties can benefit from the rewards.
Learn the fundamentals
It’s all well and good listening to Hustle, but your best bet is always to play the game, and become familiar with the product itself. Once you understand how to make money in the game, you can make a genuinely informed decision: do you want to invest in the coin?
Would you be better off playing the game and stacking up in-game assets (from which you can earn actively or passively?). Maybe both?
The point is, you need to understand how these things work before you can assess whether or not they’re likely to fly.
The market is dumping, retail traders are being driven out, and 99% of tokens are plummeting. Meanwhile, some play-to-earn projects are following in Axie’s footsteps, seeing a huge uptick in user activity against the overall market sentiment. History doesn’t always repeat itself, but it does tend to rhyme, and bear trends are setting the stage for the play-to-earn to shine. Great fundamentals will attract huge numbers of users, and price tends to map user activity. The data doesn’t lie.