AXS profitability hits historic low: Analyzing prospects for holder recovery

Posted: September 3, 2023

• Assessing Axie Infinity’s performance as a measure of future success.
• AXS was heavily discounted, but will rising competition undermine its prospects?

Axie Infinity’s native token AXS was one of the best performing top cryptocurrencies by market cap near the bull market peak in 2021. Fast forward to the present and it appears to have lost its former glory and excitement.

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But how bad is AXS’ fall from grace? The token was down by 99.54% from its historic ATH that it achieved at the height of the 2021 bull market. That same figure represents the amount of AXS that is currently at a loss.

#AxieInfinity holders in despair!

Data from @intotheblock shows that 99.54% of all addresses that bought/acquiered $AXS are currently out of the money. pic.twitter.com/tzQks7z2zJ

— Ali (@ali_charts) September 1, 2023

This performance indicates a lack of confidence in the token. This put AXS in a bit of a pickle over its fate. Consider this. The crypto market moves quite fast and the rise and fall of the AXS token is an ideal example.

Will AXS be among the cryptocurrencies and tokens to survive the next bull cycle?

Past crypto market cycles have demonstrated that not all past successes survive future cycles. The classic one-hit wonders.  A look at what’s happening within the Axie Infinity ecosystem may offer insights into Axie Infinity’s future prospects.

Axie Infinity owed its initial success to the fact that it was the first to successfully execute a working game tokenomics within a blockchain based ecosystem. This first mover advantage was a key component in its success but the blockchain gaming segment has evolved since then, and the competition has intensified since then.

AXS appears to have lost its lead in the market despite its early start advantage. It ranked 12^th on DappRadar’s blockchain games ranking. The latter evaluates multiple metrics including total value of assets in dApps contracts, unique active wallets and volume.

Source: DappRadar

Despite dropping ranks, the Axie Infinity has the second highest total value locked in smart contracts. It has also maintained a healthy level of activity despite the market slowdown.

The Axie Infinity player count registered 348,117 active users in August. In contrast, it had over 2.7 million active users at its peak in January 2022.

Source: Activeplayer.io

The above chart confirms that the network has indeed taken a hit in terms of user activity.  However, this could also reflect the low profitability as AXS lost value during the bear market. This meant that a bullish AXS could influence network profitability and hence Axie Infinity’s performance.

Read about Axie Infinity’s price prediction for 2024

A recovery remains a tall order for AXS bulls considering its price action. The token exchanged hands at $4.49 at the time of writing. The last time that AXS traded at this level was in June 2021.

However, it has now been solved and a bullish outcome may offer some hopes for a discounted purchase.