The two tokens most easily identified with metaverse platforms, decentraland (MANNA 13.69%) Y the sandbox (SAND 6.25%), both continued with their price rallies over the weekend. The former was the clear winner, up more than 15% over the 24 hours to mid-afternoon on Sunday. However, the Sandbox was not far behind, with a gain of 8%.
Cryptocurrencies, in general, continue to do well in the first weeks of 2023, but metaverse tokens are doing it. Really all right. New investor confidence in digital assets, supported by an improving macroeconomic outlook, is finding particular expression in this segment of the crypto market.
There are numerous reasons for this. Primarily, metaverse tokens anchor platforms that are tangible business ventures. Decentraland and The Sandbox are vibrant, pulsating virtual worlds where users can transact objects and real estate using native tokens.
So the commercial potential of such ventures is clear, if still somewhat uncertain during these embryonic days of the metaverse. That’s in contrast to certain altcoins, which seem to be anchored in little more than a developer’s hunger to make money.
The Metaverse platform operators are also quite smart about staying in the headlines. Both The Sandbox and Decentraland are busy places, with a seemingly continuous stream of virtual events. The latest flashy development 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 right now. On the contrary, investors appear to be cooling off on major cryptocurrencies such as Bitcoin Y Ethereal. Many are holding their breath to see what happens to interest rates after the upcoming Federal Reserve policy committee meeting scheduled to begin on Tuesday. For all the coins and tokens, big and small, a lot will depend on the outcome of that event.
Eric Volkman has positions in Bitcoin and Ethereum. The Motley Fool has positions and recommends Bitcoin and Ethereum. The Motley Fool has a disclosure policy.