The new buzzword going into 2022 seems to be, ‘Metaverse’. This new term for a virtual universe for people and communities to meet has exploded in the final quarter of 2021. After Mark Zuckerberg rebranded Facebook as Meta, many Metaverse projects that have been created using blockchain technology and DeFi concepts and NFTs have been booming. But metaverse tokens have also been soaring, with some coins giving investors almost 15,000% profit in 2021 alone.
So how can you invest in these projects and potentially get rich in the process? Let’s take a look.
What Is The Metaverse?
The Metaverse aims to combine real-world lives with virtual ones by using immersive technology that is primarily built on various blockchains. The metaverse concept is a unique combination of virtual and physical elements, allowing users to exist in a 3D and online universe – which is precisely where the world of Web 3.0 is headed. The idea of the metaverse is to establish this virtual world in all kinds of settings such as work environments, game worlds, and even social events.
Cryptocurrencies and payment systems are no more than just another investment tool; they are the basis on which the Metaverse is being built. Many metaverse projects have been created on blockchains, which are also used to create cryptocurrencies. So we are now going to look at some of the most significant projects that you can invest in, which gives you direct exposure to the metaverse.
One of the biggest ever projects related to the metaverse is Sandbox. The Metaverse is simply a play-to-earn game that exists through blockchain technology by combining various DeFi protocols and NFTs to exist in a 3D universe. Users who participate in the virtual world can create and customize their games and use digital assets to win gifts and rewards in the virtual world.
Sandbox has its own cryptocurrency token, SAND, which exists on the Ethereum blockchain. Investors can buy and sell on regular cryptocurrency exchanges and platforms with the SAND token, but participating in the Sandbox metaverse has its added advantages.
Should you invest in the SAND token?
SAND Token Price
While investing in the project itself has its benefits in the long-term, when the Metaverse will be a more established concept, the token SAND has rewarded investors with huge returns in 2021. At the beginning of the year, SAND was worth only $0.03814. But, come October and November, it had a tremendous run that saw the price reach an all-time high of $8.15. Over the last few weeks, the price of SAND has been falling, as one token is currently worth $5.20, according to Coinmarketcap.
In the context of long-term trade, it has still been one of the largest growing digital assets of the year. In total, it has gained more than 14,500% in 2021, so if you had made a $100 investment in this token on January 1, it would now be worth almost $1.5 million.
Source: Coinmarketcap (SAND – 3-month chart)
However, such insane growth needs to be justified in one way or another. So apart from the metaverse blowing up in 2021, why exactly has SAND soared so much?
At the start of November, SAND was still relatively cheap at $1.50 until the company made a few big announcements. Sandbox completed a funding round worth $93 million, held by Softbank. The money will help scale the entire project and grow it as a mainstream entertainment destination once the concept of the Metaverse gains even more popularity. With key names like Galaxy Interactive, Polygon Studios, and Kingsway Capital, among others investing in the funding, the coin price instantly shot up.
Should You Buy SAND?
An investment in SAND should be considered as a long-term growth strategy. Since the coin has been highly volatile in the past few months, expecting to make a quick buck could be a sure-shot way of losing everything you put. The coin has already gone up by 14,000%, but its price also depends on the growth of the metaverse sector. Cathie Wood, from ARK invest, believes that the metaverse is a multi-trillion-dollar opportunity, which is why big companies like Facebook and Microsoft are also getting in on it.
Ultimately, Sandbox could have further potential for growth, but it depends on how congested and tough the competition gets in the coming years. In hindsight, this may still be considered an early opportunity to invest in an up-and-coming metaverse project. Still, all potential investors need to weigh the potential returns with the underlying risk.
2. Decentraland (MANA)
The next popular metaverse game is Decentraland, which has deployed its token MANA on the Ethereum blockchain. Just like Sandbox, Decentraland is also a 3D universe. However, this game gives users the chance to develop plots of land, host events, and engage in many social activities. It looks to exist as a community-building game, trying to recreate many physical aspects in a virtual setting. The project is also built using blockchain technology, as it looks to give every user their own digital identities and ownership.
The plots of land are developed using NFTs, but the game also allows members to participate in Decentralized Autonomous Organization (DAO) platforms. This allows users to participate in the game and token governance, including staking of the platform’s Ethereum based token – MANA.
MANA became one of the most popular metaverse related tokens as it began a meteoric rise from just $1.2 towards the end of October, soaring to $5.3 by the 25th of November. After rallying by more than 400% in under two months, the token has since corrected to under $3.50, according to Coinmarketcap.
With a market cap of $8 billion, MANA is currently the second-largest gaming crypto token you can invest in. But should you buy MANA today?
Should You Invest In MANA?
Decentraland will be a very risky investment for the short term. After it soared past the $5 mark, it has corrected by over 40% and continues to fall as the entire altcoin, and Bitcoin shorting continues. But volatile altcoins have a high risk and high reward ratio, so the chances of this being a successful trade also depend on your risk appetite.
But, MANA is one of the most significant projects in its industry. Along with Sandbox and Axie Infinity, these three games have enjoyed most of its industry’s market cap. If they sustain and develop significant new projects on the blockchain, investors may be better off holding their tokens.
According to Coinquora, holding MANA for at least one year can lead to a significant upside. The online analysis site claims that MANA can reach as high as $10 if the current bullish momentum continues for the token. The possibility of reaching up to $8 is possible in the first half of the new year, which may be fuelled by new partnerships and critical announcements.
The possibility of these two projects co-existing in the coming decade will depend on how far the Metaverse can scale, along with its user adoption. It might seem like a volatile investment, but MANA and SAND tokens will be critical performers, depending on the success of the projects in the much-awaited Metaverse.