Tradelands Economic Update – May 1st, 2023
The beginning of April saw the April Fools release which was heavily focused on ships. This was followed by a month of hesitant trading and lower investment towards items. The main reason for this trend is the hype for the upcoming release which promises to bring a new method of creating shops as well as changes to ship combat. The hype caused the last two weeks of the month to have a noticeable decrease in market activity while causing players to sell items at discounts in order to save up doubloons.
Breki Crisis
The market report shows there is an influx of Breki Space Pirates to the market in April. This is allegedly bringing down the cost to own one of these furniture items. However, this item is actually not new to the market and has been around a while. It is obtained by purchasing the physical toy which comes with a code for a digital item. When redeemed, it will give you a wearable item as well as the furniture item once you log into the game.
At one point in time, the Breki Space Pirate sold for almost $1M per item. However, this has not been the case for over six months, with the last known occurrence of a Space Pirate being sold at this inflated price point occuring on October 11th, 2022. Since then, the item has been trading between $800k and $500k respectively. This month, it falls below the $500k minimum, representing a price shift with the new range operating between $350k and $500k.
This item is not likely to maintain such a low price point, making this a long-term buy if you are investing in the item’s true value. The reason for this projection is because the manufacturer of the item is not making more of them. That means the stock of available items is finite and will likely go back up once the current price setters exit the market. Moreover the Period Adjustment Report, which is a measurement of pricing influence, is continually experiencing upward momentum anytime an item is sold. This makes purchasing the item at a reduced cost a good short term option for a long-term gain.
Electrosteel Market Woes
Electrosteel is seeing a sudden decrease in price. The material, which can only be collected in-game during thunderstorms, has traditionally seen prices stay at or around $10k per piece. However, the index price is currently sitting at $9.2k per piece after a -15.81% slide in April. This is due to the buyer price point falling to $8.3k per piece which caused demand to disappear for the item.
If you are having trouble selling Electrosteel on the public market, that is because the item is currently overvalued. That means it is trading at a price point that is higher than either the buyer price or seller price. There are two ways to correct this and cause the market to re-open:
- Players who are price setters (the ones who are listing items on the market) can change their list prices closer to the average price (Blue Line on the CPR Report). This will re-start trading and will lead to an uptick in market capitalization.
- Players who are setting the buy and sell prices can adjust to meet the demands of the price setters. This typically means buying the materials at the prices they are listing it only to re-sell it at the price they prefer.
As of now, it looks like the market is heading towards Option One. The indicator is the drop of prices in the last week and a half which has led to capitalization increasing the further the price falls. If this trend continues, and if the market ultimately rebounds, a few investors who capitalized on the lower prices could end up making a significant profit from this. Essentially they will be buying up lower value items in order to re-sell them at higher prices in the future. In fact if the release ends up creating demand of Electrosteel, this profit could be obtained in the short-term rather than the long-term.
Firelance Low-Cap Market
Firelances are a textbook example of the Tradelands Small Cap market. A small cap market is one in which the overall capitalization is less than other items that appear in the same market. The Firelance is a unique example because it has significantly better combat value than some items, while also maintaining rarity status that is higher than other items. At any given time, there are around 6 consistently marketed Firelances on the market which are competitively priced. Fluctuations in the price point is based on the market mix of various item prefixes which can make the price go up or down. In other words, the mix of prefixes on the market determines the price instead of other factors such as bulk trading or manipulation of capitalization.
As far as investments go, this is a more stable investment than most other weapon types. The Firelance has a volatility of $80k, whereas most weapons are much higher. This makes it a stable choice if you are investing, but at the same time it is more difficult to make a profit, even in the long term. For investors who are banking on the limited availability as a factor for long-term profitability, it is likely that Firelances will return to the market like Katana’s did when the total number of tradable items decreases sufficiently to warrant their re-release.
Iron and Oak Rebounding
The April Fools Release had a positive impact on Oak and Iron. The number of ships that required large amounts of wood and metal were a primary reason for this upward trend as buyers returned to the market.
Once the April Fools ships were removed from the Shipwright, the Iron prices started to stabilize. However, the dev blog posts in April indicated that there might be more ships to come. As a result, players continue to stock up on wood in anticipation of this. This is causing Oak and other woods to remain stronger than average. However, the index is falling overall due to players attempting to sell items to make doubloons in order to purchase any limited items that are announced, as well as meet the minimum requirements to enter an auction.
Spyglass Prices Fall
What was once considered a one time release was re-released on April Fools, leading players to assume it will be a recurring item going forward. The prices of the Spyglass of Unusual Proportions has seen a significant decrease in the Index Value as a result. However, this fall has less to do with the actual value of the item and more to do with new spyglasses made of cheaper materials which are then placed on the market.
If you own a spyglass, the price of the item you own will be based on the material price to build. As time goes on, the item is no longer craftable and you will eventually be able to add a premium price to the sales price. However, because it’s craftable, it means if players wait long enough they will just make their own next year. In other words, it’s not likely to be in high demand unless it stops appearing in future April Fools releases.
