Apple’s 30% NFT Tax | Meta's Metaverse Mess

META’S ALREADY-MEAGER SALES EVAPORATE

Investors are not buying CEO Mark Zuckerberg’s insistence that his metaverse spending spree is “fundamentally important” to the future of Meta Platforms, and they are voting with their feet, sending the company’s shares down almost 25% in Thursday trading, with only a minor rebound by midday Friday. Meta’s commitment to an immersive version of a digital world that blends virtual, physical and augmented reality has so far been an expensive gamble for the company. Reality Labs, Meta’s division in charge of metaverse development—including Horizon World and virtual and augmented reality headsets—posted a $3.6 billion third-quarter loss in results revealed after trading ended on Wednesday. The division has cost Meta a staggering $9.4 billion this year alone and $12.7 billion since the company announced its name change from Facebook last year as it made the metaverse the focus of the company’s future.

Despite the eerie numbers, Zuckerberg is sticking by his decision, terming the investment “some of the most historic work” the company has done on a conference call to discuss the third quarter Wednesday night. Analysts have warned that the high costs for metaverse infrastructure would not produce returns satisfactory to shareholders, and Meta shares have lost more than two-thirds of their value this year.      

CORE SCIENTIFIC WARNS OF BANKRUPTCY

Core Scientific is planning to skip payments due in the coming weeks on equipment financing and promissory notes, setting the stage for a probable restructuring of the bitcoin miner that could erase the value of its shares and possibly lead to bankruptcy. The company announced the news before trading began on Thursday, sending the stock down to 18 cents at midday Friday from $1.01 on Wednesday, reducing its market value to less than $70 million. As recently as August, the company was worth more than $1 billion.

Core Scientific blamed rising computational power required for bitcoin mining, increased electricity costs and money owed to it by crypto lender Celsius Networks, which is operating under bankruptcy-court protection. Core’s finance issues reflect the overall state of the bitcoin mining industry as costs rise and the cryptocurrency tumbled to the current value of about $20,000. from a record high near $70,000. Another bitcoin miner, Compute North, filed for bankruptcy in September.

Source: Forbes Digital Assets, powered by Nomics.  Prices as of 4:00 p.m. on October 28, 2022.

APPLE ALLOWS IN-APP NFTS BUT SLAPS 30% LEVY ON TRANSACTIONS

Apple will allow non-fungible tokens (NFTs) to be purchased inside of apps designed for its mobile devices, but the company will take its customary 30% cut of such transactions, limiting the attraction for users such as gamers. The latest update to App Store guidelines, released Monday, included explicit restrictions on the buying, selling and trading of cryptocurrencies and NFTs in apps, much to the distress of blockchain enthusiasts who say this will reduce the appeal of the technology to new users. This is largely a continuation of the so-called walled-garden approach to social media on Apple’s part. The Cupertino, California-based company rarely, unless dictated by law, allows payments via third-party, non-Apple operating systems.

FIDELITY ADDS INSTITUTIONAL ETHER TRADING

Institutional clients of Fidelity Investments’ digital assets-focused subsidiary are now able to trade ether (ETH). Ethereum’s native token will be the second cryptocurrency after bitcoin available on Fidelity Digital Assets’ platform, which counts hundreds of institutional clients, according to the firm. Earlier this month, the company registered an Ethereum index fund, which tracks the corresponding index reflecting the performance of ether in U.S dollars, with the Securities and Exchange Commission. The latest move follows Ethereum’s transition to a nearly carbon-neutral model and changes in the economics of ether, completed in September.

The Wall Street Journal reported in September that the parent Fidelity Investments is weighing a plan to allow individual investors to trade bitcoin on its brokerage platform. In April, Fidelity said it would allow retirement savers to put bitcoin in their 401(k) accounts later this year. The company currently provides an exchange-traded fund focused on metaverse investments and another one for crypto and digital payments.

BLOCKCHAIN 50: CALL FOR 2023 NOMINATIONS

For four years, the Forbes Blockchain 50 list has chronicled the institutional adoption of technology popularized by bitcoin. Since the inaugural roundup in 2019 the enterprises on our list—often household names like Walmart and Boeing—have moved beyond test projects and now rely on distributed ledgers in key parts of their businesses to improve efficiency and transparency. Now is your chance to help us find the best possible honorees for next year’s issue. We look for businesses valued at $1 billion or more or those that generate at least $1 billion in annual revenue and have made meaningful use of the technology. Read more here.

ELSEWHERE

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The Crypto Story [Bloomberg]

Google Launches Cloud Node Engine For Ethereum Developers [Decrypt] 

Nina Bambysheva
Reporter
Forbes Money & Markets

Steven Ehrlich
Editor 
Forbes CryptoAsset & Blockchain Advisor

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