CS2 market cap crashes almost $2 billion overnight following controversial knife & glove trade up update

Following the release of the controversial knife & glove trade up update just hours ago, the CS2 market cap has crashed by almost $2 billion overnight. The panic selling caused by the ability to create new knives and gloves with just five Covert (Red) items has seen the CS2 market cap go from recent highs of $6 billion, to just over $4 billion at the time of writing.

Will the CS2 market cap continue to crash?

Right now, it seems as though the CS2 market cap is remaining in freefall. Europe is still waking up to the news of the new CS2 update, so selling will likely continue for a short while yet. It’s important to note that because of the limited supply of Covert items (which have now skyrocketed in price), there is a hard limit to the number of new CS2 knives and gloves that can be added to the game.

Because of this, we likely won’t know exactly how the volume of each item will be affected until the dust settles. But the market is the market, and instant reactions to an update this huge were always going to be the case. While the CS2 market cap sits at $4.1 billion right now, don’t be surprised to see it collapse even further in my opinion.

Will Valve react?

It’s difficult to say how Valve will respond to the CS2 market cap collapse. The market and its manipulation had become an issue that had to be addressed, but it’s hard to see how this solves it. Items will still be manipulated, even if cheap Coverts aren’t a thing anymore.

One thing is for sure: the cat is out of the bag now. The developer can’t reverse the update, and it now must fully commit to this change, for better or worse. But a direct reaction from Valve would be unprecedented from the ever-elusive developer. Don’t expect a statement from Valve. However, it’s rare for a new in-game update to directly affect the CS2 market cap in such drastic numbers, so these are unprecedented times.

While this is not financial advice, those holding gigantic Counter-Strike inventory investments should probably hold fire before dumping their skins. The market will stabilize, to some degree. Acting on a whim when the CS2 market cap is so volatile could prove unwise, especially as Valve itself assesses the damage it has caused to knife and glove prices.