Major blockchain gaming copyright company Animoca Brands sees valuation plummet by 75%, as interest in cryptocurrency firms cools.

Animoca Brands, a cryptocurrency and investment powerhouse, is facing a significant market valuation downgrade. Despite having billions of dollars in assets, the company's secondary market value shows noticeable weakness, especially amidst the downturn in the non-fungible token (NFT) market.

Secondary Market Valuation Significantly Shrinks

According to Yat Siu, co-founder of Animoca Brands, the company's current valuation in the secondary market is around $1.5 billion, a drop of nearly 75% from its peak in July 2022 when Animoca raised $75 million at a valuation of $5.9 billion. However, the secondary market seems uninterested in these achievements at present.

This decline in valuation aligns with the analysis from data platform Bulletin. Bulletin estimates that Animoca's current valuation in the secondary market is approximately $1.3 billion based on data collected from brokers and trading platforms.

NFT Market Fatigue, Substantial Investments Yielding Little Results

The drop in Animoca Brands' valuation is closely related to the broader pessimism in the NFT market. While the cryptocurrency market has seen some recovery since the crash in 2022, the NFT market has not been able to regain its former glory. According to data from CryptoSlam, NFT trading volume in July 2023 was only $430 million, compared to a high of $6 billion in January 2022.

The private secondary market for equity in cryptocurrency companies has always had poor liquidity, with far fewer buyers and sellers compared to major markets like the New York Stock Exchange. However, Animoca's significant investments in the NFT, Web3 gaming, and metaverse sectors in the past have made its valuation decline more noteworthy.

Animoca's Response Strategy

Facing challenges, Animoca Brands has considered an initial public offering (IPO). Yat Siu believes that if Animoca were already listed, the gap between its net asset value and secondary market valuation would be adjusted.

He stated to the media: "It's just an information asymmetry issue. If we were really listed, this situation might self-correct."

Not only Animoca, but also Circle, the issuer of stablecoin USDC, has seen a significant drop in valuation, indicating a cooling off of crypto companies in the off-chain market.

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