Meta’s Reality Labs division lost $3.672 million in the third quarter. Some shareholders are not happy with the company’s large investment in metaverse technology.
Not everyone is convinced that Mark Zuckerberg’s massive metaverse experiment is a good idea. Since Facebook changed its name to Meta in 2021, the focus of the social media giant has increasingly shifted to connecting the digital and physical worlds through augmented reality. However, a shareholder of the company recently sent a letter to the CEO in which he called the metaverse investment “enormous and terrifying”.
It didn’t take long for those concerns to be justified. Meta released its third quarter financial results after the bell on October 26 and, perhaps unsurprisingly, its metaverse division underperformed. Meta’s Reality Labs lost a whopping $3.672 billion in the quarter, mirroring a similar decline in the first quarter. That’s the risk you take when you go into uncharted territory. Despite all the hype surrounding the metaverse, these new social worlds remain largely empty. Will Meta fill the void? Only time will tell.
This week’s Crypto Biz Chronicles Meta’s Metaverse Experiment, Tesla’s Bitcoin
Holdings and streams in Reddit’s non-fungible token (NFT) collection.
Tesla’s Bitcoin losses rise to $170M in the first 9 months of 2022
While Tesla’s foray into Bitcoin was initially praised by the crypto community, the entire need is a much bigger distraction for the electric car maker. In the second quarter, Elon Musk’s company sold 75% of its remaining Bitcoin holdings, adding approximately $936 million to its balance sheet. At the end of the third quarter, Tesla’s remaining BTC had an unrealized loss of $170 million, according to a new release from the US Securities and Exchange Commission. However, the company’s net loss of BTC is not too bad, as Tesla made $64 million in profit during their previous sale. Musk proved that he has the hands of paper.
CashApp adds support for Bitcoin Lightning Network
Cash App users will soon be able to send BTC to each other via the Lightning Network, the much-hyped Layer 2 payment protocol that is supposed to make Bitcoin transactions faster and more scalable. To be clear, Cash App already supports Bitcoin transactions on Lightning in a limited capacity via QR codes. Now the popular mobile app is giving users the opportunity to send $999 worth of BTC every seven days. The problem is that the service is only available to residents of the United States, excluding New York. While estimates vary, Cash App is said to have around 80 million users. Imagine that this demographic regularly transactions in Lightning one day.
Reddit NFT trading volume reaches all-time high as wallet holders reach 3 million
The crypto winter has been particularly harsh on NFTs, a once-booming market whose trading volumes have declined over the past year. But for the social media platform Reddit, interest in NFTs seems to be increasing. Data from Polygon and Dune Analytics revealed this week that the Reddit NFT avatar transaction volume exceeded $1.5 million over a 24-hour period, bringing the collection’s cumulative volume to $4.1 million. Since Reddit launched its collection in July, more than 2.9 million collection avatars have been coined. You will love the data breakdown in this story.
Zuckerberg’s $100 Billion Metaverse Bet Is ‘Oversized and Scared’ – Shareholder
Some of Meta’s own shareholders are getting tired of their metaverse gambit and the colossal price tag behind it. Altimeter Capital CEO Brad Gerstner wrote a letter to Mark Zuckerberg, urging the company to reduce its annual metaverse investment budget from $10-15 billion to $5 billion. He called hyperfixation in the Metaverse technology “over-dimensional and terrifying”. Altimeter Capital owns a 0.11% stake in Meta, so Zuckerberg is unlikely to heed the warning. But a $10 billion annual investment from Meta translates to $100 billion over 10 years in a concept that Gerstner says is far from proven.
Before You Go: Why Are Bitcoin Whales Hoarding?
Has Bitcoin reached its ultimate end for this cycle?