The current landscape for crypto—and, by extension, NFT games—is far from ideal. I’m not sure if you’ve been following the news, but reports of projects shutting down, token prices plummeting, and teams downsizing are becoming increasingly frequent; the communities behind many of these projects are now starting to question their future viability.
To make matters worse, crypto projects are suffering not only from the impact of the war—which drains capital during times of crisis—but also from market innovations in Artificial Intelligence, a sector that has been attracting significant liquidity from global investors. When I checked the price of Bitcoin, expecting it to be hovering near the $60k mark, the chart revealed that the $60k support level had indeed been broken.
This matters because round numbers hold significant weight for investors; reaching $60k implies Bitcoin is at half its all-time high, while dropping below that level suggests it could fall even further, fueling investor uncertainty and fear.
This situation has caused the tokens of various Web3 games to crash and led entire teams to shut down operations. A prime example is Fishing Frenzy; despite the project seemingly doing well, the team decided to terminate it overnight. A similar fate befell Rumble Arcade, which exited the Web3 space and discontinued its tournaments.
Even the Ethereum Foundation is cutting its staff by 20%, a trend mirrored by other projects like Splinterlands, which has already had to downsize its team multiple times. These are just a few examples of what is happening to projects—both large and small—across the crypto ecosystem. Cutbacks are being made to get through these bear market times...
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How Do War and AI Affect Crypto Projects?
I believe there are two main reasons why this is happening. The first relates to geopolitical issues—specifically the conflict between the United States and Iran—as well as uncertainty regarding tariffs and international relations worldwide. This instability, which has come to dominate the markets, is reflected in prices, particularly within the crypto market.
This is due to the high liquidity present in this market, which operates around the clock. This liquidity acts as a quick exit route for capital whenever there is news regarding the conflict or developments in the global economy. Consequently, as a constant stream of news arrives, the market fluctuates in response.
Next, there is artificial intelligence, which has become the new focus for investors. With the launch of IPOs for AI companies, the entire market is currently fixated on this sector, largely overlooking other technologies like blockchain. SpaceX's recent IPO demonstrated just how wild the market is about AI; investors were willing to pay nearly 100 times the company's revenue, driving its market valuation to nearly $2 trillion at launch.
Capital flowing into SpaceX—and eventually into upcoming IPOs like Anthropic's—is diverted away from other companies, businesses, and sectors, and, of course, away from the crypto market as a whole. Liquidity that previously flowed into Bitcoin before moving to other market sectors—such as DeFi and Web3 gaming—is now stalling within major cryptocurrencies or even exiting them entirely; it is no longer being distributed as it once was because the market’s current big bet is AI, rather than altcoins or secondary projects.
Michael Saylor’s Sale of 32 BTC
It is also worth mentioning the recent episode involving Michael Saylor. He had previously claimed he would never sell and that his Bitcoin holding strategy was permanent; however, he ended up selling a small amount—a move that nonetheless represents a departure from his earlier stance.
Some speculate that this sale was intended to test the market, and the market's response was decidedly negative. There was a significant drop after the news broke, and BTC has struggled to recover since—though, as noted, the broader context plays a role beyond just his sale. Nevertheless, as a prominent figure in the crypto market and a pioneer in corporate BTC acquisition via debt issuance, Saylor’s words and actions inevitably impact the price.
Following the sale of the 32 BTC, Saylor stated that the "hold" rule applies to individual investors, whereas corporate strategies differ. The market did not view this explanation favorably, as it clearly contradicts everything Saylor had previously advocated. One reason for the sale—and a potential issue for Saylor’s holding strategy—is that MicroStrategy stock pays dividends in US dollars; with a shrinking cash reserve, making these payments could become a complication for him.
