The two tokens most readily identified with metaverse platforms, Decentraland (MANA 12.66%) and The Sandbox (SAND 6.13%), both continued their price rallies over the weekend. The former was the clear winner, rising by more than 15% over the preceding 24 hours as of mid-afternoon Sunday. The Sandbox was no slouch, though, with an 8% gain.
Cryptocurrencies, in general, are continuing to do well in the opening weeks of 2023, but metaverse tokens are doing really well. The newfound investor confidence in digital assets, on the back of an improving macroeconomic landscape, is finding particular expression in this segment of the crypto market.
There are numerous reasons for this. Chiefly, metaverse tokens anchor platforms that are tangibly commercial ventures. Decentraland and The Sandbox are vibrant, pulsing virtual worlds where users can transact objects and real estate using native tokens.
So the business potential of such ventures is clear, if still somewhat finger-in-the-air during these embryonic days of the metaverse. That’s in contrast to certain altcoins, which seem to be anchored to little else than a developer’s hunger for making money.
Metaverse platform operators are also quite savvy in keeping themselves in the headlines. Both The Sandbox and Decentraland are busy places, with a seemingly non-stop stream of virtual events. The latest splashy happening in this sphere is The Sandbox-hosted World’s Biggest Demo Drop, an annual DJ talent contest that kicked off its 2023 edition on Thursday.
That being said, the metaverse token rally is looking a bit frothy just now. By contrast, investors seem to be cooling on major cryptos like Bitcoin and Ethereum. Many are holding their breath to see what happens with interest rates following the looming Federal Reserve policy-committee meeting scheduled to begin on Tuesday. For all coins and tokens, large and small, much will depend on the outcome of that event.
Eric Volkman has positions in Bitcoin and Ethereum. The Motley Fool has positions in and recommends Bitcoin and Ethereum. The Motley Fool has a disclosure policy.