According to billionaire investor Mark Cuban, buying digital land in the metaverse may not be the best use of your money.

Although Cuban is a well-documented cryptocurrency enthusiast, he called buying virtual real estate in the metaverse “the dumbest thing ever” in a recent maintenance on the Altcoin Daily YouTube channel.

Despite being an investor in Yuga Labs, which owns popular NFT collections such as Bored Ape Yacht Club which sold digital land, Cuban said buying virtual real estate was “dumb.”

“It was a lot of money for them, but it wasn’t based on utility,” he said.

In the physical world, real estate is valuable because land is a scarce resource. However, this rarity does not necessarily apply to the Metaverse.

In these virtual worlds, “there are unlimited volumes that you can create,” Cuban said during the interview.

The rise and fall of digital real estate

Last year, metaverse platforms experienced a virtual land rush as users collectively spent millions on digital real estate. Combined sales on four major platforms hit $501 million in 2021, according to Metametric solutions.

In some cases, virtual real estate has cost as much as a physical home. Republic Realm, an investment company that owns and develops virtual real estate, lost $4.3 million on a digital property located in The Sandbox, one of the largest metaverse platforms, according to the Wall Street Journal.

A virtual lot next to Snoop Dogg’s digital mansion in The Sandbox was purchased for $450,000 by an NFT collector who goes by the name “P-Ape” in 2021.

However, the virtual housing bubble may have burst.

As of August 7, the average selling price of a virtual property on metaverse platform Decentraland was $14,385.27, according to WeMeta. That’s down about 61% from a peak average sale price of $37,238.68 in November 2021, according to the site.

Given the unpredictable nature of the metaverse and cryptocurrency, financial advisors recommend investing only as much money as you are willing to lose. There is no guarantee that you will profit from your investment.

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