CryptoTypes: Web3 and Metaverse (XCC-W3M)
The Metaverse is thought to be the internet’s next generation. Metaverse tokens have recently risen in popularity, providing enormous profits to their investors in the last as well as this year. Blockchain and NFTs are seen as critical components of the nascent Metaverse ecosystem.
In our last blog on the metaverse, we discussed what a metaverse is, as well as some of its uses, benefits, and drawbacks. This section will examine the tremendous investment opportunity that this space presents, as well as some of the major players in this space.
Amid the COVID-19 crisis, the global market for Metaverse was estimated at US$107.1 Billion in the year 2020, and is projected to reach a revised size of US$758.6 Billion by 2026, growing at a CAGR of 37.1%¹.
In addition, investment firm Grayscale predicts that worldwide revenue from virtual gaming alone might surpass $400 billion by 2025, up from $180 billion presently, a 122 percent increase.
Many major businesses have begun to take part. Nike announced the acquisition of RTFKT, a virtual sneaker business, in December 2021 to expand its digital reach ². Other high-fashion brands, such as Givenchy, Gucci, Dolce & Gabbana, and Adidas, have held virtual fashion shows in the metaverse. Similarly, singers like Ariana Grande and Lil Nas X have held virtual concerts in the metaverse, garnering millions of admirers from all over the world.
Now each metaverse has its own cryptocurrency token that serves as a unit of currency and is used to conduct transactions within the metaverse. While some metaverse tokens can only be spent within the metaverse, others are available on exchanges such as WazirX, Coinbase, and Binance.
In the next section we will be looking at some of the major metaverses and their respective tokens which are currently booming and can become good investments in future.
Market Cap: $4,108,724,820
CMP: $2.23
Decentraland is a virtual reality world which was launched in 2018. It is a platform which is built on the Ethereum Blockchain. Users can enter this metaverse and create, customize their own avatars. In late March, Decentraland, hosted its own Fashion Week that saw a total of 1,08,000 unique visitors over four days. Also JP Morgan Bank purchased a lounge in Decentraland to provide users a more virtually interactive experience.
From an investing standpoint, Decentraland has its own cryptocurrency called MANA; all transactions inside Decentraland use MANA, whether they are buying and selling virtual land or NFTs.
Decentraland has been the institutional investor’s favourite with Grayscale Decentraland Trust investing $64.9 million in 2021. ^3
The price of MANA is going up sharply from $0.025 in 2018 when it was launched to $2.23 currently with an all-time high of $5.15. Therefore, this can be a good time to invest in this metaverse token.
Market Cap: $3,307,780,714
CMP: $2.86
Sandbox, like Decentraland, is a virtual environment in which users may buy, trade, and create digital assets based on the Ethereum Blockchain. Sand is the name of the crypto coin used on Sandbox, and it is used to perform transactions on this specific metaverse. While it competes with other metaverses such as Decentraland, it has already garnered several high-quality partners such as Atari, Snoop Dogg, and Adidas, giving it a competitive advantage.
21Shares, a crypto exchange-traded product (ETP) issuer located in Switzerland, has created an ETP for the SAND token to provide investors with exposure to The Sandbox’s metaverse and gaming platform ^4
The price of Sand was $0.051 August and currently it is at $2.86 with an all time high of $8.4022 showing a price increase of more than 16000%.
Market Cap: $1,417,120,103
CMP: $1.62
Enjin was launched in 2017 and is a metaverse-like gaming environment where the ENJ token is used to purchase goods that aid in game progression. The primary use case for Enjin is to allow users to manage and store virtual items for games. ENJ’s price has risen from $0.017 to $1.722, with an all-time high of over $4.5.
Market Cap: $381,891,154,221
CMP: $3,174.05
If you’ve been investing in cryptocurrencies or following them, you’ve probably heard about Ethereum. After Bitcoin, Ethereum is the second most valuable cryptocurrency. All of the above-mentioned metaverse systems are built utilizing smart contracts on the Ethereum Blockchain Network. The tokens used for metaverses are ERC20 tokens, thus it is inevitable that if the metaverse area grows in popularity, the price of Ether, the Ethereum cryptocurrency token, would rise as well.
There are different companies that are building their own version of the metaverse and here we discussed some of the most promising projects in this space. The metaverse technology is booming and allocating some of your funds in this space can become a difference between good returns and great returns. However, as with any other investment it is important to not put all your money in one metaverse project and diversifying among various metaverse coins becomes important.
Written by Shantnu Sood (shantnu.sood@xumitcapital.com)
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Citation:
² https://news.nike.com/news/nike-acquires-rtfkt
References:
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