Will Axie Infinity bounce back?

Will Axie Infinity bounce back? Axie Infinity has a huge potential to bounce back. but macroeconomic and liquidity factors are not in the favour.

Axie’s price has shown many fluctuations in a few months and its price is declining for a month. But its sudden spike has made us think that “Will Axie Infinity bounce back?”. Let’s find out in this report:

Axie’s price movements

Price movements are one of the crucial factors to predict the future of any cryptocurrency. Let’s also have look at AXS’s price movement in the last 3 months:

Image: 3-month graph of AXS

Axie’s price, three months ago, was $14.3, meaning that it has declined by nearly 1.72 times since then. Also, as we can see that the decline was not consistent throughout.

Why was Axie’s price declining?

Below mentioned are the two major reasons behind the decreasing prices over the last 3 months:

The first reason is the declining number of players in Axie’s ecosystem. The number of active players on the platform was 2.78 million at the start of 2022 and the number has decreased to 701,447 as of October 2022. One of the causes of its declining popularity was Ronin bridge hack in March 2022. Since the Ronin network has seen a network breach, the number of active players is falling.

Another reason for the price decline is the unlocking of AXS tokens in late October. According to the reports, Axie Infinity released 10 million restricted tokens to investors and insiders as a part of its $200 million unlocking event. It means that investors were free to sell their AXS tokens.

Fed rate hikes

Federal funds rates are a major contributing factor to the growth of an economy. Thus, they can also affect the prices of cryptocurrency in a certain way.

Reports say that the federal funds rate has increased to 4% as of November 2^nd. The increase in the interest rates by Federal Reserve can certainly result in cutting the spending by investors.

High inflation and thus, high fed rates can impact people to don’t risk their money in gaming and thus in Axie Infinity. An increase in the fed rate can lead investors to go for other investments, such as Banks, brokerage firms, and cash-rich companies, instead of speculative investments (like cryptocurrencies), such as AXS.

Is Axie trying to strengthen the brand?

At the start of 2022, Axie Infinity shared its goal of progressively decentralizing its network.  The aim of Axie is to work towards an end-state so that the community members can make resourcing decisions for the platform.

Since the announcement, the team is actively performing the necessary steps too.

To begin with, it established “Town builders” in May 2022, which were well-established community members having demonstrated governance history.

Later in July, those Town Builders brought in numerous Contributor Electors to design and execute the pilot program. By the end of October, Town Builders and Contributor Electors have distributed the applications for the contribution program and in November 2022, a final list of entrants was rolled out into the pilot program.

Thus, it is slowly making progress and now it has more than 700 community members to join the inaugural pilot season of Axie Contributors. Every contributor will soon have access to the newly created “Governance” section in the Axie Infinity Discord.

Therefore, Axie infinity is progressively moving towards its ultimate goal of decentralising the platform and getting an excellent response from the crypto community (especially the gaming community) too.

Also Read: Will Axie Infinity reach $1000?

Axie Infinity holds some utility

Axie is a trading and gaming platform based on blockchain, which is partially operated by its players. Unlike few other cryptos available in the market, AXS has its utility within its ecosystem.

Below mentioned are two main use cases of AXS:

• Axie token holders can stake their AXS tokens to receive regular rewards.
• The players can earn non-fungible tokens and cryptocurrencies while playing by staking AXS tokens.

It means that Axie Infinity has the potential to grow in future because it is one of the top-performing gaming cryptocurrencies in recent times.

Will Axie Infinity bounce back: Conclusion

Axie Infinity has its own utility and use cases, which makes it a useful coin. Also, the Axie team is actively taking steps to make the platform even better along with fulfilling its long-term goal.

Moreover, after FTX’s crash, crypto users are actively moving towards Defi platforms because they are prioritizing self-custody now. Therefore, Axie has a good scope for growth in the future.

Thus, Axie Infinity has a huge potential to bounce back. But, as the macroeconomic and liquidity factors are not much in favour of the crypto industry, AXS’s price might not get back to the pre-covid levels.

Also, we can see that the current fed rates are also not in the favour of the crypto industry.

Therefore, it needs the current liquidity and macroeconomic factors to ease out for Axie to reach its all-time high price again, which indeed will take more time.

~Charu Taneja

Note: Crowdwisdom360 collates Predictions and data from all over the net and has no in-house view on the likely trends in the Index or Individual Stocks. Please consult a registered investment advisor to guide you on your financial decisions.

The post Will Axie Infinity bounce back? appeared first on CrowdWisdomLive.