Almost a year has passed since Facebook’s CEO Mark Zuckerberg announced the company’s rebrand to Meta.
That was a bold declaration about the direction of the metaverse, a vision many predict will touch everything from socializing to commerce, work to entertainment.
As I noted last week, however, that bet has soured for the billionaire.
But across the market, are we seeing the same pattern? Has interest in the metaverse waned?
The first place I looked was Google, where search analytics showed a large spike in interest for the term “metaverse” after Zuckerberg went all-in last October. Not long after, interest trended steadily downward.
That’s a striking chart, no doubt. But how much of this decline reflects the metaverse concept itself, and how much is simply a consequence of the broader bearish macro environment?
It’s hard to say for certain, but there’s no question many metaverse projects were significantly overhyped. It’s possible to believe in the metaverse and simultaneously conclude that numerous associated tokens were overpriced, offered little real utility, or both.
One thing I still struggle to understand is why so many investors were willing to hand over cash for anything vaguely connected to the metaverse, regardless of whether that investment had a verifiable plan to capture market share in whatever form the metaverse eventually takes.
Certainly that blind enthusiasm has cooled as the market has grown brutal, but many of these companies still carry very large valuations even after declines of 80% or more.
The Dot-Com Bubble
Remember that the internet transformed the world in ways no one fully anticipated. Still, think about how many companies failed during the dot-com boom.
A painful example is Priceline.com. You might not recognize the name today, but it was once one of the largest internet companies in the world. Its pitch was compelling: with half a million unsold airline seats each day, customers could use Priceline to name the price they were willing to pay.
Airlines would move excess inventory, customers would get cheap seats, and the market would clear. It made sense on the surface—and Priceline would take a cut of every transaction.
It was a sensible business plan, a clear market gap, and the kind of idea that made people say “that’s clever.”
Launched in 1998, Priceline sold 100,000 tickets within seven months. Thirteen months after launch the company went public at $16 a share. The price jumped to $88 on the first day and settled at $69. Expansion plans were ambitious—why couldn’t the system work for hotel rooms, train tickets, even mortgages?
A closing price of $69 after the IPO gave Priceline a valuation approaching $10 billion. It was one of the most valuable companies of the young internet era.
And then it fell 94%.
That story isn’t unique. The Nasdaq plunged more than a third of its value within a month of peaking in April 2000.
What Does the Dot-Com Bubble Have to Do with the Metaverse?
That brings us to the point I’m making. You can believe in the internet without believing in every company that called itself an “internet company.” Many of those firms were unprofitable, with business plans that never produced sustainable revenue. Priceline, for example, posted losses of $142.5 million in its early quarters.
Yet the internet undeniably changed the world.
There are many Pricelines out there today. Perhaps the “profit” obsession of the dot-com era maps to a “utility” obsession in the metaverse era. Before investing in any of these tokens, ask what they actually do. Do they have a clear roadmap to leverage the metaverse to create real value? Most importantly, is there genuine utility?
Those seem like basic questions—and they are. But so many coins fail to answer them. Don’t forget how easy it is to create a cryptocurrency; a simple copy-and-paste can be enough. Combine that ease with the flood of capital flowing into the space—from retail investors and venture funds alike—and it’s not surprising so many tokens have collapsed.
For every Amazon, there are ten Pricelines.
Another point worth making is that there’s no guarantee the metaverse will reshape society as profoundly as the internet did. Even with the internet meeting countless expectations, many dot-com-era companies still failed. Imagine how many more would have failed if the internet itself had not succeeded.
Conclusion
Believing in the metaverse doesn’t mean you should blindly buy anything labeled “metaverse.”
Going forward, all crypto—metaverse-related or otherwise—will continue to follow broader equity market trends and macro conditions. That means even tokens that offer real utility and have strong positioning may struggle while the wider market languishes.
But even if markets recover, metaverse tokens must still prove they deliver tangible results—something many have yet to do. As with any investment, conduct careful due diligence on related coins, identify potential pitfalls, and ask the basic questions outlined above.
Don’t let the metaverse seduce you with utopian promises. A visionary dream won’t pay the bills, and the dot-com bubble remains a cautionary tale.