Crypto News, Feb. 3: Why Facebook NEEDS the Metaverse
Metaverse

Crypto News, Feb. 3: Why Facebook NEEDS the Metaverse

6 months ago

Also today, $320 million has been stolen in the fourth-largest crypto hack in history.

Crypto News, Feb. 3: Why Facebook NEEDS the Metaverse

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Editor's Note: The Metaverse REALLY Matters to Facebook

It's been a day to forget if you've got stocks in Meta.

As discussed in our news roundup below, the company's share price has tanked by more than 20% — wiping over $200 billion from its valuation.

Monthly active users are stagnating, younger users prefer to be on TikTok, and advertising revenues are coming under pressure.

It's now starting to become painfully obvious why the company — which owns Facebook, Instagram and WhatsApp — is focusing so heavily on the metaverse.

This virtual world isn't just meant to be an escape for Meta users, but an opportunity for the tech giant to continue growing and remain relevant.

Here's the problem: Reality Labs, the division responsible for the metaverse, lost $10 billion in 2021. Even bigger losses are expected in 2022.

Meta is going to be burning through a lot of money as it attempts to bring its vision to life, and that's going to dent profits for the foreseeable future.

There are risks. A large portion of the public is skeptical about whether they want virtual reality to become a part of their everyday lives, the tech is still clunky, and Meta faces stiff competition from blockchain-based rivals such as Decentraland and The Sandbox.

Zuckerberg, and his shareholders, will be hoping this bet pays off.

$320M stolen in Wormhole hack 🚨

More than $320 million worth of cryptocurrency has been stolen after an audacious hack targeting Wormhole, a protocol that connects the Solana and Ethereum blockchains. About 120,000 Wrapped Ether tokens were taken — and the project has promised to pay the hacker $10 million if they return the funds. Although users have been assured that their funds are safe, the hack has been calamitous for the price of SOL, which has fallen by 14.36% over the past 24 hours to $95.67.

Meta plunges after dire Q4 results 📉

Meta's share price is on course for the worst day in its history after the tech giant gave a grim update on its performance — and revealed eye-watering losses in its metaverse division. Throughout 2021, Reality Labs made a net loss of $10.19 billion — and even bigger losses are expected in 2022. To make matters worse, Facebook, Instagram and WhatsApp are struggling to compete with TikTok in the battle for younger users. Shares are down 23%, wiping $200 billion off the company's value.

Bitcoin 'could bottom out in spring' 👀

The bottom could be in for Bitcoin within the next few months, according to Fundstrat. Analyst Mark Newton says there are signs the cryptocurrency is stabilizing, but it's too early to confirm BTC has witnessed a turnaround in fortune. He regards $40,000 as a crucial level that bulls need to reclaim for further upward momentum — and warns that a return to $35,111 could result in a painful retest around $33,000. "It's tough to rule out further weakness technically speaking," Newton says.

Winter is coming for miners in Texas ❄️

Texas is on the brink of an Arctic blast that is forcing crypto miners to suspend their operations — raising questions about the state's suitability to serve as a Bitcoin mining hub. Last fall, Governor Greg Abbott requested executives to power down during the cold winter months to stop the electricity grid being overwhelmed. The state is hoping to avoid a repeat of the carnage seen in February 2021, when 10 million were without power. Riot Blockchain is among those temporarily shutting up shop.
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