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Last week, thousands of investors lost money simultaneously. But they hadn’t invested in stocks, or even crypto. They had bought Counter Strike 2 skins, digital items that had a market cap of $6bn until the market crashed by 50% in just 24 hours. How did this happen, and why are these videogame skins so valuable?
The reason is both scarcity and demand. CounterStrike 2 is one of the most popular games in the world, averaging nearly 1 million concurrent players. Each counterstrike weapon skin is like a digital item. It can be bought and sold on the steam marketplace for steam cash, or traded with other players. There’s even marketplace websites where skins can be traded for real money.
There’s a limited amount of skins, so you have to compete with other players to purchase them, which is why they have real-world value.
The supply is limited, but it’s not fixed. Most CS2 skins are created by opening cases that are like slot machines. Cases are provided as rewards for playing the game and then can be opened by purchasing a key that costs $2.50. This provides a random skin from the case collections. Skin rarity determines the probability of receiving a specific type of skin, with gold ones having just a 0.26% chance of being earned from a case. That’s on average 1 in every 385 cases.
These gold skins were knives or gloves, also the most desirable skins, as they were always equipped in game. This combination of scarcity and demand meant CS2 knives and gloves could be worth thousands of real world dollars.
But on the 23rd October, the game suddenly changed. Valve, the developer, issued a small update, with a new game mode and a few bug fixes. But also inside, was this line. 5 Covert items can be exchanged for one knife or gloves. This caused chaos.
All of a sudden five skins that were as cheap as $5 could be converted into a knife that costs thousands. In the panic, players rushed to sell their knives and gloves, pushing prices down. And because these were the most expensive items, the market cap came crashing down with them.
Many players ended up losing huge sums, but others actually made money. Covert skins, some reasonably priced, suddenly exploded in value as the demand for them shot up, because people wanted to use them in trade up contracts to get knives and gloves. As covert skins were destroyed in trade ups, this also reduced their supply, pushing prices up further.
But most skin speculators held gold skins, so they were the ones who lost out the most. There were also examples of actual players who had bought their first knife for hundreds of dollars just the day before, only to find it worth half the amount after the update.
Rare knives have always been expensive, but prices had become heavily inflated as speculators began to hoard them. Valve will have known that this update would crash the market. It’s likely they did this to pop the bubble, making skins more affordable for the average player, and discouraging speculative hoarders.
Despite the crash, many knives are still worth thousands. The market is already showing signs of recovery too, with some speculators bulk purchasing skins at what they view as discounted prices. They may even profit from this.
But now it’s clearer than ever that they’re at the mercy of Valve. Another update could wipe half their money away again.
Then again, in a game where a digital sticker can cost $100k, logic might not be the first thing on traders’ minds.
References
Nasir, H. (2025). Ludicrous $6 billion Counter Strike 2 skins market crashes, loses $3 billion overnight — game update destroys inventories, collapses market. [online] Tom’s Hardware. Available at: https://www.tomshardware.com/video-games/ludicrous-usd6-billion-counter-strike-2-skins-market-crashes-loses-usd3-billion-overnight-game-update-destroys-inventories-collapses-market.
Pricempire (2024). Pricempire. [online] Pricempire.com. Available at: https://pricempire.com/ [Accessed 28 Oct. 2025].
Steam (2025). Counter-Strike 2 Events – Counter-Strike 2 Update – Steam News. [online] Steampowered.com. Available at: https://store.steampowered.com/news/app/730/view/516350567072662004 [Accessed 28 Oct. 2025].
Steam Charts (2025). Counter-Strike: Global Offensive – Steam Charts. [online] steamcharts.com. Available at: https://steamcharts.com/app/730.
