matrix07012 @matrix@gameliberty.club

@freddie_the_fed @matrix @SuperSnekFriend @William_The_Dragonborn

@hj @coolboymew

last night was a movie. valve wiped almost TWO BILLION DOLLARS worth of counter strike item value with just a few lines in a changelog. let me explain why this is crazy, beyond just initial $2b figure (seen in screenshot 1).

knives have always been a safe investment bet for cs players because (and skip this if you are aware of how counter strike knives work):
1) they have a fixed supply and are very rare. in previous versions of the game, the only way to get a knife was to buy one outright from another player or unbox them from a case. the chance to get a knife from a case unboxing is 0.26%, and a lot of cases have been either discontinued (no longer drop from active play) or have been moved into a rare drop pool. this means that the number of knives from those cases is fixed, and as the number of cases in the wild dwindles, the value of those knives will rise.
2) they are highly desirable. having a knife is the ultimate flex. it's what you'll be seeing as a player 50% of the time on your screen, and while the cosmetic skin has no value on the actual gameplay, expensive knives have always been a status symbol to signal just how much money you have to throw away buying a few colorful pixels.
3) they are highly variable. the cheapest knives pre-collapse were $100 and looked like dogshit. some of the more expensive knives can easily breach the $1 million mark. because of the different ways that the textures are applied, some knives can have certain desirable patterns, inflating that specific knife's value over another with of the same type but different "pattern" (integer value affecting the way the skin is applied to the knife) or "float" (integer value that affects the durability of the skin, or how scratched up it looks to the player). all of these differences give rise to a huge speculative market that values certain very rare/aesthetically pleasing characteristics.
4) they are highly liquid. there are plenty of third-party marketplaces like dmarket that allow you to trade your cs items for real world money that you can withdraw, as opposed to trading on the steam community market, which would just net you steam dollars if you were to sell your items on there. because of the availability of multiple markets to sell on, and the extremely low supply of knives, there are always speculators and players that are willing to buy your knife off of you due to the expectation that it will appreciate in real dollar terms over time.

all of that combines to make knives essentially the counter strike version of gold. they even have a gold background when you mouse over them in your inventory. knives are rare, desirable, liquid... at least they were until last night.

there is now a new way to obtain these knives aside from the extremely low percentage rate case drop: trade-up contracts. all players have access to a trade-up contact, which now lets player take 5 way less expensive and rare covert/"red" items to obtain a knife or a glove (even more rare than a knife) item. essentially, think minecraft crafting, but turning 5 dogshit items into a gem (as seen in screenshot 2)

naturally, with the news that the cornerstone of value of every player's inventory was no longer the rare and safe investment that it once was, the cs item trading community followed warren buffett's sage advice: "crash the fuck out and liquidate your entire inventory on the open market IMMEDIATELY". this caused the value of knives to plummet.

some more expensive knives fell as much as 80%, like one that i saw on the open market that fell from almost $10,000 to just $1,500 in value. the one that i show in screenshot 3 plummeted from ~$550 to ~$250, with current inventory post-immediate market shock sitting around ~$300. this is a natural reaction, as the output good of the trade-up contract is now a lot less rare as a result of valve's changes.

what is more insane is the market's reaction to the price of the input good, the humble covert skin. for example, a skin that i once had in my inventory (see screenshot 4), that i bought for $3 and sold for $6 a few months ago is now worth ~$60. covert skins, previously overlooked by the community, are now TEN TIMES the value they were before the update.

we can also see some funny market dynamics play out in the pricing of knives. there is, of course, the initial crash, then a small uptick and bump, before prices start slowly climbing back up again (this process is in reverse for covert skins). the small uptick/bump was caused by a rumor that trade-upped knives were trade banned, and subsequently ineligible to be sold on the open market, which would have made them more valuable. for about an hour, the community believed this rumor, until it quickly got debunked, causing the value to drop again.

it is believed that the majority of the price crash comes from chinese traders. there is speculation that valve introduced this change specifically to curb the artificial price inflation that was caused by chinese traders, who would buy rare knives in bulk and sit on them to inflate their value, kind of like the de beers diamond monopoly. with this change artificially flooding supply on the market (not in real time, but in the next coming years), the long-term prospects of these knives are now in jeopardy. this led chinese traders, who are not known to be the most resilient to these types of upsets, to liquidate their entire stock to attempt to salvage their tens of millions of dollars of value. remember, the average player has just one knife, if one at all. this change seems targeted to streamers and traders, who have millions of dollars worth of these rare items sitting in their inventories, and they are currently affected the most.

i bought the knife in screenshot 3 for about $250. i didn't buy it directly, instead i put a bid order for $250 and went to bed, because i knew that some dumb shmuck would probably panic sell as i went to bed. i did so because i think it looks pretty, and because this entire price crash set off an early black friday shopping spree for price-sensitive buyers. we may never get another opportunity to buy these kinds of rare items at such a steep discount, so we might as well take advantage of it. and indeed, at 6am, my bid order was filled. someone was desperate enough to part with their $500 knife for half off. i also believe that certain skins, like the fade, are timeless in value and will bounce back up, netting me a neat 100% profit over the christmas period if i choose to sell (which i probably will. i don't play cs anymore.)

of course, there is a chance that i might lose money on this trade if the value continues to fall further. but what the hell, i have money lying around and i'm a high risk tolerance individual (i like gambling), so i might as well hold onto it for a little bit, rather than netting an immediate $50 in profit. this might come back to bite me in the ass. who knows! the knife is also trade banned for 7 days, so i kinda have no choice but to ride it out lmao.

the only remaining question: what next? will the item of knives continue to fall over the coming months as more are minter, or will they bounce back up as markets normalize? we will probably see 2 more waves of sell-offs as trade-locked items become available to the open market (for context, as soon as an item is bought or sold on the community market or sent to another item, it is locked for 7 items to that player's inventory, after which they are free to transfer it as they wish). after which, i believe that prices will most likely normalize and continue growing. even though the price of all knives was affected, not all knives will have their supply inflated. some collections do not have knives that can be crafted from covert items, and some knives will just have certain rare characteristics amplified further. there is also speculation that there are simply not enough covert items to craft enough knives to overwhelm the market, meaning that their value is currently inflated and will fall in the coming months.

either way, the frenzy of buyers selling and buying items in an attempt to take advantage of the market was a sight to behold. the combined fear and greed of the markets was electrifying. this change was announced in the early american evening hours. china was just waking up and europe was fast asleep, causing the market to sell these items off on phases as china and later europe realized what the fuck was happening, with american traders easily cashing in on the falling value of their items. it was a clusterfuck, and i am so glad i got to live through it. thank you for the entertainment, volvo

https://www.youtube.com/watch?v=9ZJDD9oIIMY
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Introducing dynamic filesystem corruption. Coming to a RHEL clone near you.
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