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

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

Despite being an investor in Yuga Labs, which owns popular NFT collections like Bored Ape Yacht Club that have sold digital plots of land, Cuban said buying virtual real estate is “stupid.”

“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 scarcity does not necessarily apply to the metaverse.

In these virtual worlds, “there are unlimited volumes 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. On the same subject : Asia’s new agricultural revolution: planting a high-tech future. Combined sales across four major platforms reached $501 million by 2021, according to MetaMetric Solutions.

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

An NFT collector who goes by the name “P-Ape” in 2021 bought a virtual plot of land next to Snoop Dogg’s digital mansion inside The Sandbox for $450,000.

However, the virtual real estate bubble may have burst.

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

Given the unpredictable nature of the metaverse and cryptocurrency, financial advisors recommend only investing money you’re willing to lose. There are no guarantees that you will make a profit on your investment.

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