While cryptos at large are on a downward trend in this new year, a slice of the market is continuing to be one of the biggest winners of the crypto world. Metaverse virtual real estate is maintaining the impressive traction it garnered in 2021, growing at a fast pace, both in interest and prices.
“Despite the calamity in traditional and in crypto markets, we’ve seen real adoption happening in two areas that (so far) seem to be immune from the broader market: NFTs and the Metaverse,” Hayden Hugues CEO of crypto social trading platform Alpha Impact, told GOBankingRates. “What started as a small community of niche enthusiasts has grown into a full-blown ecosystem. Ecosystems like Sandbox and Decentraland are major hubs of transactions right now, and metaverse gaming is right around the corner with the team from Enjin incubating and investing heavily in projects. Metaverse land is especially interesting as there is a concept of intrinsic value that carries over from the real world.”
Indeed, the market opportunity for bringing any number of metaverses to life may be worth more than $1 trillion in annual revenue, according to a Grayscale report. The asset management firm estimates that revenue from virtual gaming worlds could grow to $400 billion in 2025, from $180 billion in 2020.
For the week ending Jan. 21, The Sandbox – one such virtual world – generated close to $12 million in land NFT trading volume, becoming the top-grossing virtual world in terms of NFT sales in DappRadar rankings, while Decentraland generated $6.2 million in NFT trading volume, according to DappRadar data.
Further proof that the space is going mainstream, Tokens.com recently announced it bought 116 parcels of land in Decentraland’s Fashion District for $2.4 million to hold “the first of its kind virtual fashion event,” March 24th to 27th, which is “expected to draw some of the biggest fashion brands in the world,” according to a statement.
The fashion show will feature avatar models, catwalks, pop-up shops, after parties and immersive experiences, connecting digital to physical fashion. “The event aims to strengthen the fashion ecosystem in the metaverse, connecting communities, new designer brands and NFT projects,” according to the statement.
James Aitken, Chief Marketing Officer, Ethernity Chain — an NFT project in which auctions verified artwork — told GOBankingRates that we’re in the early stages of metaverse development, similar to the Myspace days of the rise of social media platforms.
“With global brands such as Samsung entering the Decentraland metaverse and using NFT-utility to monetize assets across the blockchain and enhance interactivity for consumers and fans, a whole new audience is sure to invest in metaverse platforms,” Aitken said. “Investors should also pay close attention to projects like The Sandbox, which Ethernity just partnered with to bring its library of world-class licenses to its platform, further widening the metaverse ecosystem’s audience base.”
He added that believers in NFT utility and metaverse projects will invest throughout the coming months, as will speculative investors.
“Those could very well end up being good investments, but I would temper expectations for 2022. I think we should expect to see big moves happening in this space in 2023 and 2024,” he said.
In addition, native tokens of several metaverses are also skyrocketing: MANA, Decentraland’s underlying token is up 868% in the past year, while The Sandbox’s token is up 2616.6% and Axie Infinity’s was up 6592.5%, according to CoinGecko.
Zach Friedman, founder of digital asset trading firm Secure Digital Markets, told GOBankingRates that he too anticipates the metaverse to continue to boom in popularity this year, due to major brands and big tech companies taking notice of the space’s potential and functionality.
“These groups are focused on a digital ‘land grab’ to position themselves for the future. Facebook’s ‘Meta’ has been a strong catalyst for growth and development in the broader market thus far, and the sentiment is very bullish and new projects and secondary markets are heating up significantly,” Friedman said.
In terms of what investors should look at, Friedman says that similarly to traditional real estate, they should pay attention to both location and functionality.
“Blue-chip Metaverses such as Decentraland and Sandbox have been building new districts and bringing in events such as metaverse fashion week in DCL,” he said. “These companies are not just dreamers but builders, supporting their Metaverses and bringing in real-world utility and user growth.”
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