Axie Infinity (AXS) Broke Its All-Time High in a Bear Market. What Is It and Can It Rise Higher?

This cryptocurrency is AXS, the governance token of Axie Infinity. For those not familiar with Axie Infinity, it’s an online NFT-based video game, comparable to Pokémon in that you breed, train and battle with collectible monsters. It has been around since 2018, yet it has only really taken off in the last few months, with its AXS token breaking its record high on several occasions last week, hitting a peak of $49.20 on Saturday July 24.

And with the game only increasing in popularity, it’s very likely that it will continue to challenge its ATH in the coming weeks. Not only that, but its status as a popular game could help to further boost cryptocurrency adoption among laypeople, helping to boost the market at a time when it continues to seesaw between recovery and relapse.

Axie Infinity (AXS): What Is It and Why Is It Doing Well?

Axie Infinity is an Ethereum-based game available to download and play for Windows, Mac, Android and iOS. The idea of the game is to raise, battle and collect unique Axies, while also building a kingdom in which to house them. You can earn tokens for playing the game, a feature which has resulted in the game’s model being described as ‘play to earn.’

The game has two native tokens. The first are known as small love potions (SLPs), which are used to breed Axies. The second is known as axie infinity shards (AXS), which again is the game’s governance token, letting users vote on proposals, earn yields (for staking), and pay for Axies within the game’s NFT marketplace.

Aside from being bought on the open market (e.g. via crypto-exchanges), the two tokens can be earned in different ways through the game itself:

• Fighting in player-versus-player battles.

• Breeding Axies and selling them.

• Farming

• Participating in challenges, quests and games

That’s the basic gist of Axie Infinity, which has gained momentum during the Covid-19 pandemic, particularly in the Philippines, which currently accounts for more than a third of its players.

Source: PlayerCounter

On July 5, Axie Infinity passed 350,000 daily active users, an impressive figure insofar as its DAU tally stood only at 100,000 at the beginning of June. The thing is, it quickly surpassed this 350,000 figure in only a week, reaching nearly 500,000 by July 11.

Source: Twitter/The Jiho

At the same time, Axie Infinity’s revenues — from transaction and marketplace fees — have risen to $100m so far in July. Back in June, it generated a little over $10m, while in May it managed barely more than $2m.

Source: Twitter/Packy McCormick

What’s especially impressive about Axie Infinity’s revenue growth is that, for the past couple of weeks, it has allowed the game to generate more in fees than all other dApps combined.

Source: Twitter/The Jiho

Needless to say, Axie Infinity is growing pretty fast, and this growth has been reflected in the rising price of its AXS token.

As recently as July 7, AXS was the 92nd biggest cryptocurrency by market cap, priced at $13.80. It now stands at $40, having doubled in less than a week, and having risen by over 1,000% in 30 days.

It broke its all-time high on several occasions last week, hitting $38.34 on Friday July 23, before rising to $45 and then $49.20 the following day.

What’s arguably most significant about this is that AXS rose during a bear market, with pretty much every other major coin down when it made its moves. For example, when AXS reached a then-record high of $29 on July 15, bitcoin had fallen to $31,300, having been at $36,000 less than two weeks previously.

More Gains

In other words, Axie Infinity and AXS have hit new record highs on their own merits, and not because they were simply riding a bull market along with other altcoins.

And there’s a very good chance they’ll continue enjoying new highs in the coming weeks and months. This is not only because Axie Infinity continues to attract new players, but because new players means greater demand for AXS.

Basically, AXS is accepted as currency within the game’s NFT marketplace, enabling players to buy Axies and other in-game objects, such as land. As stated before, it also serves as the game’s governance token and grants holders the right to participate in special sales or auctions.

Essentially, the more the game grows, the more AXS will be in-demand. More players means more people trying to buy Axies and other objects, which means more demand for AXS, and so on.

And a virtuous circle is being formed here: the more people play Axie Infinity, the more AXS will rise in price, and the more AXS rises in price, the more people will want to play Axie Infinity.

Yet in contrast to so many other cryptocurrency and blockchain projects, Axie Infinity already offers a genuinely viable product, a game which people actually want to play. This is the main reason it has risen to new highs during a bear market, because it offers more than just the empty, circular promise of gains.

And more broadly, Axie Infinity could be instrumental in getting more people into cryptocurrencies as a whole, at least in the sense of familiarizing the public with how they work and can be used. It also shows that some platforms do actually have a real use case, something which may serve to improve crypto’s less-than squeaky image.

Indeed, some Axie Infinity backers are predicting that it could spur a new bull market, one based more on fundamentals than pure speculation.

Source: Twitter

Of course, it’s hard to predict new bull markets, but it’s certainly clear that Axie Infinity is generating plenty of interest. And now that the market seems to be recovering somewhat we really could see AXS hit new highs pretty soon.