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Facebook Name Change Creates Bull Market for Metaverse Coins. How Long Will it Last?

Facebook seems to be the gift that keeps on giving to crypto.

First there was the outage in early October that took all of its apps offline for six hours, in the process highlighting the need for truly decentralized internet services. And now it has changed its company name to Meta, with its new focus on building a ‘metaverse’ suddenly shining the spotlight on various blockchain-based platforms that already offer fully functioning virtual worlds for users to inhabit.

Facebook is now Meta.

Such was the effect of Facebook’s (much-ridiculed) announcement that the native tokens of several major decentralized ‘metaverses’ surged in the next few days. Decentraland’s MANA rose from $0.80 on Thursday morning to an all-time high of $4.11 near the end of Saturday, an increase of 413%. Likewise, the Sandbox’s SAND jumped from a similar starting point ($0.81) to $2.35 on Sunday, while Axie Infinity’s AXS rallied from $126 to its own ATH of $160.

As CoinGecko’s ‘metaverse’ category reveals, these weren’t the only tokens to bounce over the weekend, but with pretty much all of them falling (at least a little) back down, it begs a question. Namely, can Facebook’s pivot to the metaverse keep this new bull market for decentralized virtual worlds going? Will the tokens of such platforms rally strongly again in the near future? Well, this all depends primarily on two factors: 1) how successful Facebook’s expansion into virtual worlds becomes; and 2) how fundamentally sound and sustainable the decentralized metaverses themselves are.

Facebook Creates Frenzy for Decentralized Metaverse Cryptocurrencies

Aside from Decentraland, the Sandbox and Axie Infinity, we saw the following metaverse coins rally over the past weekend:

  • Enjin Coin (ENJ): rose by just over 50%, to $3.21 by the end of Saturday

  • UFO Gaming (UFO): increased in price by 208%, to an ATH of $0.00003341 on Saturday

  • Radio Caca (RACA): jumped by 65%, to an ATH of $0.00390237

  • StarLink (STARL): rose by 210%, to an ATH of $0.00006402

  • RedFOX Labs (RFOX): appreciated by 270%, to $0.200697

These are just a selection of the biggest winners among decentralized metaverse cryptocurrencies. As a whole, the metaverse subcategory listed on CoinGecko grew by over 500% in a week, although many of the biggest gainers have declined significantly since hitting highs over the past weekend.

Basically, the rally had two interlocking rationales. The first is simply that Facebook’s entry into the fledgling metaverse sector will generate unprecedented levels of public interest, with a significant portion of this interest spilling out into preexisting metaverses such as Decentraland and the Sandbox (which also have the advantage of not being tainted by Facebook’s unenviably bad reputation). This interest will accumulate and grow over time, particularly if Facebook does succeed in getting people interested in spending more time online and in some kind of VR environment, with people looking for better or more interesting alternatives.

Facebook Tweet

Source: Twitter

At the same, many people have already begun speculating that Facebook will do what it has always done (as with WhatsApp and Instagram) and simply buy out its biggest decentralized metaverse rivals. This would potentially make the token holders of the affected platforms considerably wealthy.

What if Facebook buys Decentraland

Source: Twitter

Because of this mixture of speculation, hype and also FOMO (fear-of-missing-out), the likes of MANA, SAND, AXS, ENJ and others rallied vigorously in the few days following Facebook’s announcement.

And while the vast majority have calmed down since reaching peaks on either Saturday or Sunday, it’s worth pointing out that pretty much all of them remain higher than they were pre-Facebook becoming Meta. For instance, while MANA is (as of writing) 40% down from its ATH of $4.11, it’s still a whopping 200% up over the past week. Similarly, SAND is still just over 110% up compared to a week ago, while UFO is 148% up and ENJ is 40% better off.

Past, Present and Future Growth

Given their still-elevated prices, it seems as though the new status of metaverse cryptos is here to stay. Particularly when the short-term picture for other cryptocurrencies is a bit stagnant right now, traders may continue entering their markets in the coming days and weeks, seeing as how there doesn’t seem to be a better prospect for outsized gains right now.

On top of this, many of these platforms have good prospects for strong — and sustainable — future growth.

Most notably, when we covered Axie Infinity back in July, the NFT-based open-world game boasted around 500,000 daily active users. Now, it claims approximately 2.3 million, indicating just how vigorously it has grown on its own account, without any help from Facebook. And since July, Axie Infinity has introduced staking for AXS, has seen its Ethereum-linked Ronin bridge increase its total value locked to over $5 billion, and has also generated nearly $1 billion in revenues over the past six months.

Something similar (although not quite as impressive) can be observed for the other major decentralized metaverse cryptocurrency platforms. With Decentraland, it has seen its user base more than triple over the past year, ranks among the top ten platforms for NFT sales (on NonFungible), and it even hosted its first ever MetaverseFestival in the days preceding Facebook’s announcement.

To take one more example, Enjin’s platform — which creates non-fungible tokens for games and virtual worlds — has generated well over two billion NFTs to date, and also became the first NFT platform to join the United Nations Global Compact on sustainable development.

Of course, many of the smaller metaverse cryptocurrencies that rallied over the weekend belong to platforms which are minor by comparison to the three above, and it’s arguable that most of them will fall by the wayside as the bigger platforms soak up the bulk of the emerging market for metaverses.

It’s also possible that, even if Facebook’s metaverse does end up being successful, decentralized alternatives may not be able to share in the fruits of this success.

For example, acquisitions by Facebook/Meta of existing blockchain-based platforms may not be possible, because such acquisitions could qualify the tokens concerned as unregistered securities. Or, more simply, users of Facebook and its metaverse may simply not be interested in decentralized alternatives, as suggested by the fact that Facebook — despite its numerous misdeeds — claims nearly 3 billion active monthly users, while more ethical or well-meaning social networks continue to languish in relative obscurity.

Still, these are only worst-case scenarios, and there’s no doubt that Facebook’s name- and strategy-change has served to put decentralized metaverses on the map. And with the biggest of these already enjoying organic growth, their respective native cryptocurrencies could indeed continue to rally in the coming weeks and months.

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CryptoVantage Author Simon Chandler

About the Author

Simon Chandler

Simon Chandler is a journalist based in London. He writes about technology, markets and politics, and has bylines for Forbes, Digital Trends, CCN, Wired, TechCrunch, the Verge, the Sun, the New Internationalist, and TruthOut, among many others. His Twitter handle is @_simonchandler_

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