A low number of players means a low demand for AXS
As a quick refresher, AXS serves as a payment token within the Axie Infinity game ecosystem, allowing players to purchase non-fungible tokens (NFTs), in this case the digital pets we all know as "Axies."
It also acts as a utility token that players can spend to breed new Axies.
New users entering the Axie Infinity ecosystem need 3 Axies to take on other Axies. When they win, the platform rewards them with another native token, called Smooth Love Potion (SLP) while winning bigger tournaments earns them AXS.
Consequently, old Axie Infinity players rely on new ones to keep up the demand for Axies.
Otherwise, they could risk former players selling their SLP and AXS earnings on the markets (e.g. cryptocurrency exchanges), thus adding downward pressure to their prices.
But when native Axie Infinity token prices go down, it also makes the game less attractive to new players, who would still need to buy 3 Axies in order to earn SLP and AXS, only now they would be worth less.
The Axie Infinity ecosystem has gone through stages, as mentioned above, in 2022, with its player count falling to 8,950 in June from 63,240 in January, a drop of almost 85%, according to data provided by Dapp Radar. Interestingly, this coincides with the 80% drop in the price of AXS in the same period.
Inflation rising
New inflation data has further curbed bullish bets on major cryptocurrencies, which, one way or another, fuels the bearish outlook for AXS.
In particular, the US consumer price index (CPI) rose at an annual rate of 8.6% in May, compared to 8.3% in the previous month, accentuating investor fears that the Federal Reserve will be forced to raise interest rates aggressively in the coming months, which would push risky assets down across the board.
As a quick refresher, AXS serves as a payment token within the Axie Infinity game ecosystem, allowing players to purchase non-fungible tokens (NFTs), in this case the digital pets we all know as "Axies."
It also acts as a utility token that players can spend to breed new Axies.
New users entering the Axie Infinity ecosystem need 3 Axies to take on other Axies. When they win, the platform rewards them with another native token, called Smooth Love Potion (SLP) while winning bigger tournaments earns them AXS.
Consequently, old Axie Infinity players rely on new ones to keep up the demand for Axies.
Otherwise, they could risk former players selling their SLP and AXS earnings on the markets (e.g. cryptocurrency exchanges), thus adding downward pressure to their prices.
But when native Axie Infinity token prices go down, it also makes the game less attractive to new players, who would still need to buy 3 Axies in order to earn SLP and AXS, only now they would be worth less.
The Axie Infinity ecosystem has gone through stages, as mentioned above, in 2022, with its player count falling to 8,950 in June from 63,240 in January, a drop of almost 85%, according to data provided by Dapp Radar. Interestingly, this coincides with the 80% drop in the price of AXS in the same period.
Inflation rising
New inflation data has further curbed bullish bets on major cryptocurrencies, which, one way or another, fuels the bearish outlook for AXS.
In particular, the US consumer price index (CPI) rose at an annual rate of 8.6% in May, compared to 8.3% in the previous month, accentuating investor fears that the Federal Reserve will be forced to raise interest rates aggressively in the coming months, which would push risky assets down across the board.
Edrul Alejandro.
Telegram : t.me/EdrAlejo
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Telegram : t.me/EdrAlejo
Instagram : www.instagram.com/edrul_alejandro/
Link : linktr.ee/Edrul_Alejandro_
