More like the market inflated for an audience which isn't there anymore, specially the western market. Shit like Regloss and new NijiJP waves have shown that japan is still growing even now, because vtubers have broken into the mainstream. In japan chuubas are now celebrities that are accepted, they are artists, they get plastered all over akiba in giant screens and in subway stations, their concerts are massive.
In the west we will probably never reach that point, western vtubing is imo a cynical satire of its roots, it's a mockery, a dumb gimmick and it will never be taken seriously. Instead of bursting through to the mainstream like it was doing in 2020, the western market has just become a subcategory of the japanese pop culture and streaming spheres, nothing more than a fleeting novelty. The bubble has finally popped with how many corpos who were trying to copy Holo died last year, I predict that the future will see one of two outcomes: western vtubing will shrink massively and become a niche for weirdos, or it will just become a different kind of streaming that nobody cares about. Or maybe both, the first for the JP companies that manage to hold on and the latter for the westoid corpos who give up trying to imitate the east.