First Mover Asia: We’re Still Missing Good Web3 Games; Bitcoin Swoons Below $29K

Good morning. Here’s what’s happening:

Prices: Bitcoin lost the mojo it regained on Tuesday, dropping below $29K; ether fell toward $1.9K.

Insights: Valuations for some Web3 games are higher than the lifetime revenue of some successful, traditional gaming companies, and yet Web3 doesn't have many games that make players enthusiastic.

Prices

CoinDesk Market Index (CMI) 1,250 −73.5 ▼ 5.6% Bitcoin (BTC) $28,936 −1387.4 ▼ 4.6% Ethereum (ETH) $1,948 −149.8 ▼ 7.1% S&P 500 4,154.52 −0.4 ▼ 0.0% Gold $2,007 −0.4 ▼ 0.0% Nikkei 225 28,606.76 −52.1 ▼ 0.2% BTC/ETH prices per CoinDesk Indices, as of 7 a.m. ET (11 a.m. UTC)CoinDesk Market Index (CMI) 1,250 −73.5 ▼ 5.6% Bitcoin (BTC) $28,936 −1387.4 ▼ 4.6% Ethereum (ETH) $1,948 −149.8 ▼ 7.1% S&P 500 4,154.52 −0.4 ▼ 0.0% Gold $2,007 −0.4 ▼ 0.0% Nikkei 225 28,606.76 −52.1 ▼ 0.2% BTC/ETH prices per CoinDesk Indices, as of 7 a.m. ET (11 a.m. UTC)

Bitcoin's Wednesday Swoon

What happened to bitcoin's Tuesday mojo?

The largest cryptocurrency by market capitalization tripped early Wednesday, falling first below $30,000 for the second time in three days, and hours later, below $29,000 for the first time in more than a week. BTC was recently trading at about $28,930, down about 4.6% from Tuesday, same time, and far from its heights last week when a moderately encouraging consumer price index (CPI) and renewed investor optimism buoyed markets.

Investors' mood soured on Wednesday after a sobering U.K. inflation report and massive sell order on Binance. "One way or another, the hot U.K. CPI report that we got in today's European session made the market more vulnerable and may have been the piece of macroeconomic data that pushed that large seller to pull the trigger, which led to a cascade of sell orders as we dropped below $30,000," Matt Weller, global head of research at online broker Forex.com, told CoinDesk TV's "First Mover" program.

Ether continued its mirroring of BTC this week, falling around 7.1% to trade at around $1,945. The second-largest crypto in market value topped $2,100 on Tuesday after tumbling on Monday along with most other major altcoins. The second largest crypto in market value had been on an upswing in the days following the much-ballyhooed Ethereum Shanghai upgrade, the final step in the platform's shift from a proof-of-work to a more energy-efficient proof-of-stake protocol.

APT, the token of layer 1 blockchain Aptos, and ARB, the native crypto of layer 2 blockchain Arbitrum, recently plunged about 10% and 13%, respectively. The CoinDesk Market Index, a measure of the crypto market's overall performance, was recently down 6.2%.

Equity markets traded roughly flat for a second consecutive day, with the tech-heavy Nasdaq Composite rising 0.03% but the S&P 500, which has a strong technology component, dropping 0.01%. Investors have continued to digest unexpectedly strong first-quarter earnings from the financial services sector, although a number of regional banks have yet to report. Their results will offer additional clarity on the banking sector's health.

In an email to CoinDesk, Markus Levin, co-founder of XYO Network, a cryptography-backed oracle network that anonymously collects and certifies data with a geographic component, noted "a tremendous amount of anxiety in the market right now, particularly when it comes to macroeconomic conditions."

"The U.K.’s higher-than-expected inflation numbers seem to be hitting a bit too close to home, both in the U.S. and in other countries where monetary policy is tightening and fears of a recession are growing," Levin wrote. "It seems as though all these macroeconomic concerns may finally be catching up with bitcoin."

He added that after bitcoin's strong gains in recent weeks, "it's not surprising to see consolidation. Crypto markets have always been particularly susceptible to price fluctuations, so none of this should be cause for panic.”

Biggest Gainers

There are no gainers in CoinDesk 20 today.

Biggest Losers

Asset Ticker Returns DACS Sector Avalanche AVAX −9.2% Smart Contract Platform Terra LUNA −9.0% Smart Contract Platform Decentraland MANA −8.6% Entertainment

Insights

Web3 Lacks Good Games

For all the billions in market share that Web3 gaming and the metaverse command, there’s one thing missing: a good game.

The traditional gaming world has tentpole franchises that haven’t made in revenue over their lifespan what some Web3 games are worth. Yet. you can find plenty of people that have played a chapter of Grand Theft Auto, Halo, or have joined a multiplayer skirmish in PUBG or Call of Duty.

Some of these games are memes-of-the-moment; PUBG seemed omnipresent in 2017-2018 with its fast-paced mobile-friendly action but is not so big anymore.

But it's likely harder to find someone that’s done the same for a Web3 game. Mention PUBG around gamers and most will know it. Can the same be said about a Web3 game? In a report from last week, DappRadar argued that Asia is going to dominate Web3 gaming. It bases this response on a survey where 48.6% of respondents said that blockchain games “seem interesting.”

But what about after they give them a try? Are they still interesting?

Square Enix thinks there’s a market. The studio behind the Final Fantasy game franchise, which is as close to the holy canon as it gets for gamers, is apparently bullish on the vertical, having recently unveiled a trailer for its first web3 game.

Its fans, though, aren’t as sold.

Some of the highest-rated comments in response to the video are overwhelmingly negative.

“How do I dislike a video more than once,” said J Miki. “With this rate, the next Final Fantasy will be the final fantasy,” added another.

Important events

9:15 a.m. HKT/SGT(1:15 UTC) People's Bank of China Interest Rate Decision

11:30 p.m. HKT/SGT(15:30 UTC) Bank of Canada's Governor Macklem Speech

7:30 a.m. HKT/SGT(23:30 UTC) Japan National Consumer Price Index (YoY/March)

CoinDesk TV

In case you missed it, here is the most recent episode of "First Mover" on CoinDesk TV:

Bitcoin Drops Below $30K in Sudden Sell-Off; SEC Chair Gensler Declines to Say if Ether Is a Security

Bitcoin dropped more than 3% in just 15 minutes in European morning hours, starting a slide that sent BTC as low as $29,045.22. Forex.com global head of research Matt Weller joined "First Mover" to discuss. Plus, reaction to Tuesday's exchange between House Financial Services Committee Chairman Patrick McHenry and SEC Chairman Gary Gensler, who repeatedly declined to answer the congressman's question on whether ether (ETH) is a security. Former SEC senior trial counsel Howard Fischer and Linklaters U.S. head of blockchain and digital assets Joshua Ashley Klayman discussed. Blockdaemon CEO Konstantin Richter and Scroll Co-founder Sandy Peng also joined "First Mover."

Headlines

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Institutions Flock to Ether After Shapella Upgrade: Open interest in CME futures has risen to the highest level since March 2022, indicating an influx of institutional traders to the crypto market.

Hong Kong Court Declares Crypto as Property in Case Involving Defunct Gatecoin: The ruling would give Hong Kong liquidators more clarity on how to treat crypto assets caught up in winding down procedures, law firm Hogan Lovells said.

Crypto Wealth Manager Onramp Taps CoinDesk Indices to Create Customized Portfolios: The partnership will provide advisers with a wider range of options for shaping successful portfolios.

Russia Plans to Mine Crypto for Cross-Border Deals, Says Central Bank: International sanctions have been imposed on the country to exclude it from the U.S. dollar-powered global payment infrastructure.