Have CS2 knife trade ups killed skins for good?

Valve has nuked the skin economy with its update this morning, allowing people to trade five Coverts for a knife. Knives have dropped by over 50%, some even 70%, and it does not bode well if you’re a Counter-Strike investor. So, are CS2 skins doomed, or is there still a glimmer of hope for your investments to recover? Let me be completely rational here, even as chaos reigns over CS2 knife trade ups.

Why has Valve decided to destroy the CS2 economy?

I saw a very interesting post by CSFloat on X talking about the numbers. In the post, it was explained that even in the worst-case scenario, where all skins are traded up for knives and gloves, the supply for these golds would only double, not increase exponentially. This is strictly under the assumption that the skin prices you’re trading up don’t rise, and knife prices don’t plummet, making the 5x trade-up viable. But this won’t happen; realistically, the supply is going to increase by 20–30% at best.

So why the massive dip? First, the panic this update has incited has shaken the confidence of the player base. People are terrified of what’s coming next and are undercutting prices with reckless abandon. There’s this asinine notion that being able to trade five $10 items for a knife somehow means the knife price will now be $50. And it is setting an unrealistic expectation for their knife’s worth.

Another issue is the impact on rarity. The chance of getting a gold from a case is 0.26%. People would open thousands of cases to the point that the case price would increase manifold just to unbox a knife. From a case, unboxing a covert is 3.2%. So it would take roughly 365 cases to unbox a gold, but on average, you could get five reds in about 150 cases. So yes, rarity has taken a nosedive as well.

But why did Valve seemingly self-destruct? Why would they sabotage their own economy like this? Valve has been ignorant and indolent at times, but never imbecilic. Then why nuke their own money-printing machine? There’s only one plausible explanation: greed.

Making sense of CS2 knife trade ups

Let’s roll it back. What has Valve been doing lately? They’ve been trying to pull people toward the Steam Community Market instead of third-party websites, so they can siphon more revenue from the transaction tax. They’ve also introduced Terminals, where people have to pay for the skin itself. You’re also aware of the bans on case openings in countries like China, Belgium, and the Netherlands. But how does all this converge here?

I came across an interesting theory today, that Valve is trying to attract people to Terminals and move on from the archaic concept of case openings. China has always been the crux of the skin economy, and being banned from directly opening cases won’t help. But the issue is that Terminals aren’t as prevalent, and the dealer dictates the skin prices, an unorthodox and thus unpopular system. What Valve might be doing here is eliminating the traditional case model and allowing people to trade up to knives with skins acquired through the Terminal.

This way, Valve captures 100% of the value from skins. Earlier, when you unboxed an AK-47 Asiimov worth $50, Valve would, at best, earn $5-6 in the rare case that you sold it on the market. With the Terminal, Valve pockets the entire $50. People can still trade up for knives. Sure, the economy could collapse temporarily, but Valve would end up taking a bigger slice of the pie. People may drift away for a while, but they’ll inevitably crawl back.

All this sounds outlandish, but the reasoning must lie somewhere along these lines. Because apart from the avarice to mint more money, there’s no logical motive behind this. Making knives “affordable” for everyone? Don’t make me laugh; Coverts are now even more expensive. And Valve wouldn’t willingly tank billions from their own economy just to make a Butterfly Knife worth $200.

There is another silver lining for Valve here. Historically speaking, the Butterfly knives have increased exponentially in value. People would, as a result, spam open Breakout Cases in the hopes of getting their hands on the cherished knives. It meant more supply of skins, which were not really as desirable. Even the Coverts of the case, the P90 Asiimov, and the M4A1-S Cyrex weren’t as expensive. This created a gap between the golds and the skins of the same case. Now, since the Coverts increase in value, the ROI for the cases would also go up. This is going to be the case for many cases, meaning people might be more tempted to open cases.

So what should you do?

Well, I’m no financial oracle, especially when it comes to Valve, whose decisions defy logic itself. But selling right now might not yield the best outcome. If Valve lets things be, skins may take a year or two to recover naturally. However, I have a hunch they won’t just sit idly by while their economy implodes. So be patient, this might be the steadiest decline yet, but there’s a fair chance the tide will turn. The market will recover, but it will not be instantaneously, at least not organically.