CS2 market cap crashes 40% overnight after Valve update
Prices of rare digital collectibles linked to the popular game Counter-Strike 2 (CS2) crashed by up to 70% on Thursday after developers pushed a surprising update.
Specifically, prices of some gloves and knives, two of game’s most expensive “skins” (in-game items), plummeted on secondary marketplaces when the game’s creator, Valve Corporation, decided to allow the exchange of five relatively inexpensive “Covert items” for ultra-rare knives. The update also allowed StatTrak Covert items to be exchanged for StatTrak knives.
Some of these could have fetched resale prices north of $1,000 yesterday.
Moreover, the company introduced the same, 5:1 conversion rate for non-StatTrak Covert items for a regular knife or glove. This new rule similarly tanked the formerly premium prices of knives and gloves.
Players recorded themselves exchanging five items worth less than $100 combined for knives that would have fetched hundreds or even thousands of dollars on Wednesday.
Claiming 10 figures in overnight losses for CS2 skin collectors
Estimates for the annual transaction volume of all CS2 skins ranges widely from $1.5 to $6 billion, with precise numbers difficult to attain due to poor transparency by secondary marketplaces.
Regardless of its precise size, however, CS2 skins are certainly one of the most liquid markets for digital collectibles.
Prior to yesterday’s game update, some of the rarest knives were reselling for over $20,000, with the world’s rarest knife allegedly worth over $1 million.
Because Valve’s update affected the resale price of so many CS2 knives and gloves, Pricempire estimated overnight mark-to-market losses of approximately $2 billion — from $6 billion to approximately $4 billion today.
Read more: Steam ordered to give up ‘Crypto King’ login after $280K moved via CS2 skins
There was some initial confusion over whether so-called “Trade Up” items were exchangable at the new ratio, but Valve permitted that as well, cementing losses.
Complaints are raining in on social media platforms like Reddit, Discord, X, and CS2 forums. For example, somebody blamed the devastating news on the lackluster reception of Valve’s Genesis Terminals, which unsuccessfully attempted to disintermediate some unauthorized third-party marketplace activities.
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