According to one researcher, the future of the metaverse and gaming tokens is bright, but there is little meaningful acceptance in the present.
During the weekend sell-off that has gripped the crypto market, Metaverse and gaming-related coins have taken a beating.
Messari, a cryptocurrency research firm, says Decentraland (MANA) is the top-ranking metaverse asset with a 25 percent loss over the last seven days. As of Nov. 25, MANA had a market capitalization of $10 billion, but that value has since dropped to $6.63 billion.
It was a record-breaking day for the MANA token on Thursday, when it reached $5.84 for the first time. It has increased by approximately 40% in the last week.
According to Messari, the virtual reality platform built on the Ethereum blockchain has a market capitalization of $9.2 billion. Axie Infinity’s AXS, a play-to-earn game based on the metaverse, has a reported market cap of $8.6 billion, but this rise puts it ahead of it.
Metaverse tokens have seen a significant gain in value since Facebook announced in October that it was changing its corporate name to Meta in order to reflect a greater emphasis on the sector. Decentraland had a market valuation of little over $2 billion at the time.
Despite Facebook’s makeover, analysts like Juan Pellicer at IntoTheBlock believe that investors are still interested in capitalizing on the story of the metaverse.
Earlier this month, Pellicer suggested that the recent surge in MANA transactions of more than $100,000 could indicate institutional interest. As a result of the recent virtual property sales, Decentraland is once again in the public eye, which could potentially be boosting the price.
On Monday, Reuters reported that a subsidiary of Tokens.com, Metaverse Group, purchased a piece of virtual real estate in the Decentraland metaverse for $3.2 million.
Some other gaming and metaverse tokens are also seeing an increase in value. SAND hit a new high on Monday as Adidas hinted about a collaboration between the two firms. The price of Axie Infinity’s AXS token has risen by 15% in the last seven days to roughly $140.
Denis Vinokourov, an independent crypto expert, said that “gaming is still very much at the forefront” ahead of Sandbox’s alpha release on November 29.
On Nov. 29, Hong Kong-based Animoca Brands’ Sandbox will release a portion of its metaverse to the public via a multi-week, pay to win event. Users will be able to earn up to 1,000 SAND as well as unique non-fungible tokens throughout the event (NFT).
MANA’s decline is closely followed by AXS, one of the tokens of Axie Infinity, which has fallen 23% in the last week. According to CoinMarketCap, the AXS market cap is currently $6.21 billion, but it peaked on November 7 at $9.77 billion.
According to Lucas Outumuro, head of research at IntoTheBlock, “there is no surprise that gaming/metaverse tokens got hammered the worst given the recent buzz.” According to Outumuro, the significant concentration of short-term traders demonstrates that these tokens are highly speculative.
SHIB (SHIB), the “dogecoin killer,” exhibited high concentrations of short-term traders, as well, which is a strong indicator of currencies riding hype cycles.
More than three-quarters of MANA token holders have purchased in the last 30 days, compared to fewer than ten percent of BTC and ETH dealers, according to IntoTheBlock research.
Outpacing the rest of the market’s decline.
The value of Bitcoin, the world’s most popular cryptocurrency, has fallen by 15% in the last week. On Saturday, the price of Bitcoin plunged as low as $42,400 on some platforms.
The Sandbox’s native cryptocurrency, SAND, has dropped 25% in the last seven days, following the drop in MANA’s value during the same period.
“At this point, there is no genuine acceptance of the metaverse and gaming tokens,” Stack Funds COO/founder Matthew Dibb remarked in a recent interview.
According to Dibb, “Most of the price appreciation was based on future predicted value rather than present valuation metrics.” Additionally, there have been a number of early investors who have decided to liquidate their positions since the fall,” he says.
Index An index that tracks virtual world-building crypto assets and protocols is down 8.7 percent on the day.