Nearly a year has passed since Facebook’s CEO and the pantomime villain Mark Zuckerberg announced that his company would rebrand as Meta.
It was a bold declaration of a shift toward the metaverse, a vision many promised would encompass everything from socializing to commerce, work and entertainment.
As I wrote last week, that bet has so far been a costly misstep for the billionaire.
But is this trend visible across the broader market? Is interest in the metaverse actually fading?
My first stop was Google Trends, which shows a large spike in searches for the term “metaverse” after Zuckerberg’s October announcement last year, followed by a steady decline.
That chart is damning, no doubt. But how much of this decline reflects the concept of the metaverse itself, and how much is simply a result of the wider macroeconomic environment?
It’s hard to say. What is clear, however, is that many metaverse projects were heavily overhyped. You can believe in the metaverse while also recognizing that numerous tokens in this space are either overvalued, provide little practical utility, or both.
One thing I still struggle to understand is why so many investors were willing to pour money into anything labeled metaverse, regardless of whether the project had a verifiable plan to capture market share in whatever the final metaverse might look like.
That blind optimism has been punished in a brutal market, yet many of these companies still carry massive valuations even after plunges of 80% or more.
The Dot-Com Bubble
We shouldn’t forget that the internet transformed the world in ways that exceeded even the highest expectations. And yet, think about how many companies collapsed during the dot-com bust.
A striking example is Priceline.com. You might not recognize the name today, but it was once one of the biggest internet companies. Its premise was alluring: among the half-million airline seats that go unsold every day, customers could use Priceline to name the price they were willing to pay.
Airlines would offload excess inventory, travelers could secure cheap seats, and the market would reach equilibrium. It made sense on the surface, and Priceline would take a cut of every transaction.
The business plan seemed plausible, the market gap real, and the idea impressive enough to earn nods at parties: “ooh, that’s clever.”
The company launched in 1998 and sold 100,000 tickets within seven months. Just 13 months after launch it went public at $16 per share. On its first trading day the stock jumped to $88 and later settled around $69. There were grand plans for expansion—why couldn’t the model work for hotel rooms, train tickets, or even mortgages?
Closing at $69 after the IPO gave Priceline a market value approaching $10 billion. It was among the most valuable companies in the early internet era.
And then it fell by 94%.
This story is not unique. The Nasdaq lost more than a third of its value a little over a month after peaking in April 2000.
What Does the Dot-Com Bubble Have to Do with the Metaverse?
Here’s the core point: you could believe in the internet without buying into every company that called itself an “internet company.” Many of those firms routinely lost money, and profitability was rare during the dot-com era. For example, Priceline posted losses totaling $142.5 million in its first few quarters.
Yet the internet unmistakably changed the world.
Today we have many companies that resemble Priceline. Perhaps “profit” in the dot-com era corresponds to “utility” in the metaverse era. Before investing in any of these tokens, ask what they actually do. Do they have a clear roadmap for how they will leverage the metaverse to create tangible value? Most importantly, do they provide real utility?
These questions are basic—but they matter. Many coins cannot answer them. Remember how easy it is to create a cryptocurrency: from a technical standpoint, a simple copy-and-paste can produce one. Combine that with an influx of cash from retail investors and venture capital, and it’s unsurprising that so many tokens have collapsed.
For every Amazon there were ten Pricelines.
It’s also worth noting that there’s no guarantee the metaverse will be as influential as the internet. Even though the internet reached nearly every imaginable purpose, countless Priceline-like companies existed. Imagine how many there would have been had the internet failed.
Final Thoughts
Believing in the metaverse doesn’t mean you should blindly buy anything with “metaverse” in its name.
In the foreseeable future, every cryptocurrency—metaverse-related or not—will continue to follow broader equity markets because that is the current macro environment. Even tokens that offer real utility and are well-positioned won’t deliver gains to investors while the wider market languishes.
And when the market eventually recovers, metaverse tokens will still need to prove they can deliver results—something many of them cannot do today. As with any investment, perform thorough due diligence, tune out the hype, and ask the fundamental questions discussed above.
Don’t let the metaverse seduce you with sweet words whispered in your ear. Utopian dreams won’t pay the bills, and the dot-com bubble serves as a stark reminder of that reality.