The skin market of Counter-Strike 2 is going through turbulent times. After the update from the developers, the market cap dropped by half, then recovered by one billion dollars. Now the first trade-up knives are unlocked. The views in community are divided: some are happy with the price reforms, others are sounding the alarm, and surely there are people taking advantage of the situation.
What will happen next with the skin market? Why did Valve do it? What could be the maximum market volume? What might come next for skins? To answer these and many other questions, CS.MONEY Blog asked TrueDad, a well-known trader and YouTuber who has devoted his life to skin trading.
Could you share your thoughts about the update? Whose side are you on, the angry or the opportunists?
I don’t see a point in being angry in this situation, because we all knew what market we were working in. The skin market on Steam has always been high risk, and that’s why it sometimes shows 10x on some items over a year. So, if someone enters this market, they have to accept even the risk of a full trade ban. It felt a little unpleasant because my portfolio also dropped significantly, but I tried to use the moment cool-headedly and buy more of the positions that interested me.
What caused such a market crash? Do you think the market overheated and popped?
There are several reasons. First, opinion-leaders, bloggers and streamers around the world immediately started releasing videos with titles like “The market is done, over, I’m leaving”. Thus pushing their audience into mass selling of items. Second, the key factor in the crash was the sale of items in China because sometimes items were sold on Chinese sites at two and a half, even three times cheaper than on Steam.
The reason for this was a chain of tragic events in China, which in turn were caused by part of the audience believing in the market so much that they worked on it with borrowed money. I think these are the two main reasons for such a strong market drop.
What will happen next with Covert skins? Will their number shrink a lot? Will the volume of red skins be restored?
I think the volume will not be restored, but the prices of the Covert skins from which you can craft only non-very interesting and expensive knives should still fall significantly. But the Covert skins which guarantee you, for example, a Butterfly Knife, like Breakout Collection skins, might still go up in price even more.
What do you think Valve was hoping for? What is the goal of this patch for the developers?
Long term, this update can bring even more life to the market and can lead to some cases being opened more often, because the high cost of a Covert weapon will pull other items up, which in turn increases the chance of the case paying off, which means people will likely open them even more. And Valve will make good money from this. Maybe they also wanted to lower the average cost of knives so they fit into the limited $2000 trade cap that the Steam marketplace has.
What will happen on October 30, when skins exit the trade-hold? How will that affect the future?
Most likely we will see a price drop for knives, gloves and Covert skins that people managed to buy cheap on third-party platforms on day one of the update. That should drag down the rest of the market too, but I think this will be temporary, because already you can see that demand for buying skins is huge and everyone is waiting for October 30 to stock up for the long term.
What could be the maximum market cap? $10 billion? $20 billion? What is a realistic number?
I believe that if Valve does not introduce a trade-ban in the next 10 years, and we see continued development of the market without super unexpected critical updates, then the market could well reach even $50 billion. And it’s also important that this niche stays without being regulated by authorities.
Was the skin market really better than crypto?
It was definitely much more stable and predictable. Overall it still remains that way, we just need to survive the next series of drops. Everything should return to the previous scenario.
What changed after the October 22 update?
Globally, nothing at all: panic will go away and the market should stabilize. If Valve wanted to kill trading and investment in the game completely, they would have introduced a trade-ban right away, like they did in PUBG. Since there isn’t one yet, the market will live anyway, even if it has to go through another serious drop.
What might come next? Crafting from souvenir skins?
Quite a possible scenario. If I were Valve, I’d add another type of item even rarer than a knife. Maybe in the future we’ll see something like this; in general for updates the list is, for me at least, still very broad:
- Additional weapon accessories, like wraps on the handle, changing the magazine with bullets and many more things you can add.
- Rare combo stickers, which will consist of 5 parts and together form one large full picture. A big sticker, roughly speaking.
- Custom weapon inspect animations.
- Changes to weapon firing sounds (for you personally, not for others so that balance remains).
- Illuminated parts on weapons, especially for night maps.
And that’s only the things that come to mind first. The list could be very long.
What will happen with cases? Why was Terminal released? Will it replace cases as such?
I think Terminals will come out alongside cases. For example, in the active drop we will have Terminals, and from the Armory Pass you can buy cases. Terminals were created to circumvent the laws of some countries. For example, in France, Netherlands and Belgium you couldn’t open cases, whereas you can open Terminals. Through that Valve gets additional profit.
If instead of cases from the active drop you will get different Terminals, naturally cases in the future will go even higher.
Is now a good time to become a trader?
For traders a stable market is better, but for investors a good entry point is emerging. Good luck to everyone with investments and remember about risks: you should only invest money you’re ready to lose.
