Why these 3 Metaverse-centric crypto projects are growing more and more today

What happened

Undeniably, the cryptocurrencies associated with the metaverse were among the least likely candidates for a price rally in 2023. Indeed, the price action in this asset class has been dismal, with many tokens in this space losing 80% of their value or more in 2022 alone. .

However, with the new year came better optimism for this sector. As of 1:45 PM ET, Flow (FLOW 14.18%), Decentraland (FLAW 4.52%)and Sandstone (SANDS 2.71%) they increased by 13.7%, 12.6%, and 12.1% respectively in the last 24 hours.

These moves appear to be linked to a number of interesting catalysts for these projects.

Flow has reported stabilizing transaction volumes over the past month, which is important for investors, as it is a non-fungible token (NFT)-focused blockchain project that has been in decline for some time. Flow is also among the projects that have cut staff, making its growth prospects less likely to materialize.

Decentraland reported on January 6 that the upcoming architecture and design competition will be able to receive 50,000 visitors over a five-day period. This event will be closely watched by those looking at the long-term potential of digital real estate.

Finally, The Sandbox has reported some pretty impressive digital land parcel sales in recent weeks, with total proceeds of over $1.6 million. Therefore, while demand appears to remain very low in this space, The Sandbox remains among the key locations that investors are currently looking for.

So what

Whether it’s transaction volume, build activity, or any metric of activity with crypto projects related to the metaverse, it’s been a tough year for the sector. Accordingly, investors looking to justify the high valuations of these tokens in 2021 with expected growth have had little to grasp during this crypto winter.

Still, these three projects certainly provide speculative growth potential for investors looking to play this crypto rally. In general, cryptocurrencies and other digital assets such as NFTs are difficult to value. This can at times lead to significant overstatements and understatements in terms of valuation. If a new rally begins, these high-beta tokens could be among the best ways for aggressive investors to capture this rally.

What now

Whether it’s wise to try to catch this jump (or what could be a falling knife instead) we’ll see in hindsight. Today’s rally has been fairly widespread, with most risk assets up. Various macro forces seem to be driving such risk sentiment, so until sentiment cools down, it’s possible that the crypto market is in for a decent year.

Still, until these metaverse projects show significant growth, it’s hard to pinpoint an underlying catalyst for this group. In the absence of a foundation, this increase becomes much more precarious. So this is one sector that, at least for now, I will keep an eye on from the sidelines.

Chris MacDonald has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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