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(Bloomberg) -- Even with recent market gyrations, the chill of crypto winter is becoming a distant memory for traders of digital tokens. The launch of spot Bitcoin exchange-traded funds in January and ringing endorsements from Republican presidential candidate Donald Trump have helped them bounce back from the rout sparked by the collapse of FTX.

But for the metaverse built on digital assets, it remains a very different story.

The interconnected system of digital worlds claimed to be ushering in a new frontier in human creativity, dubbed web3. Built around a foundation of blockchain technology and digital tokens, one promise of web3 was that people would be able to monetize their creativity free of interference from big tech. In reality, key measures of the value of web3 — like the prices of NFTs and other tokens associated with certain much-hyped platforms — are mostly on the decline.

Read: Once-Hot Market for Metaverse Land Is Attracting Risky Bets

“We believed in the promise of web3, but I started looking around and realizing that nobody was making money in this space, and I still would challenge anybody to show me a web3 company that’s making any money,” said Andrew Kiguel, chief executive of a metaverse company once known as Tokens.com. “The promise of this failed.”

Tokens.com took a big bet on web3 in 2021, when it spent $2.5 million on a plot of real estate in Decentraland, a then-popular metaverse that let visitors use a web browser to access a virtual space. Once there, visitors could engage in activities like playing poker or attending a fashion show. Kiguel compared purchasing metaverse land at the time to buying real estate in a growing city, and Tokens.com planned to develop and rent out some of its portfolio to tenants.

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Parcels of digital property on such platforms are essentially tradeable, nonfungible tokens. Like other cryptoassets, they rise and fall in value in response to changes in demand.

When a series of scandals rocked the crypto industry in 2022, Decentraland got clobbered along with the rest of the market. The community owned platform has lost about 90% of its user base, according to data site Decentraland Metrics, and its property values have dropped some 95%, according to data from blockchain information firm DappRadar. Mana, Decentraland’s cryptocurrency, now trades at around less than 30 cents versus a high of more than $5 in late 2021. Representatives for Decentraland did not respond to a request for comment.

Even big companies that sought to create their own, centralized versions of the metaverse have struggled. Meta Platforms Inc.’s Reality Labs recently reported a nearly $4.5 billion quarterly loss, underscoring the difficulties that even a tech baron like Mark Zuckerberg faces in squeezing a profit out of a digital existence.

Tokens.com’s virtual real estate portfolio lost 80% of its value, according to Kiguel. The company has since ditched the metaverse, sought to formally change its name to Realbotix and started developing silicon humanoid robots powered by artificial intelligence following its purchase of Simulacra, which makes hyper-realistic sex dolls.

A business which aimed to offer Metaverse property loans also got hammered in the collapse. In early 2022, TerraZero Technologies Inc. had completed what it said was one of the first-ever metaverse mortgages, the start of a plan to improve access to digital property after surging prices squeezed out would-be buyers.

The company issued a loan for a property valued at $40,000, with a 25% down payment. It has rejected every loan application since, Dan Reitzik, the company’s chief executive officer, said in an interview. All the mortgage applicants were purely speculating on the price of land, and none planned to build anything, he said.

And when land values came crashing down, that first and only mortgage was returned at cost.

Crypto and NFTs are still too complicated for the average person, according to Reitzik. “The consumer is not ready for it. The brands are not ready for it,” he said.

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A metaverse that runs on fiat currency is much more likely to attract the general public and businesses, Reitzik said.

James Casey, an associate professor of computer game design at George Mason University, shared a similar sentiment. He believes fiat currency and centralized assets are necessary for the metaverse to succeed in the near future.

Before entering academia, Casey spent over 12 years as a video game developer, creating massive multiplayer online games, a kind of predecessor to current expressions of the metaverse. These games often had customizable avatars, expansive worlds and in-game marketplaces where players could — with real money — buy, sell and trade virtual items.

“Blockchain is great technology but a game company wants to own their own databases,” he said. “When you have a virtual playground where you can do anything, people still want to own stuff, own the virtual world. They see it as just a new frontier of ownership.”

Read: NFTs in Video Games Become Cautionary Tale for the Metaverse

--With assistance from Michael P. Regan.