What happened
Today’s been an interesting day in the cryptocurrency world. Various top metaverse tokens have recovered some of their losses over the past week, surging on positive market momentum. Among the top tokens many investors are watching are Axie Infinity (CRYPTO:AXS), Decentraland (CRYPTO:MANA), and Enjin Coin (CRYPTO:ENJ). Over the past 24 hours, they have appreciated 4.1%, 10%, and 6.4%, respectively, as of 3 p.m. ET.
Seeing these tokens actually push higher throughout the day is a welcome sight for investors. Metaverse-themed cryptocurrencies soared in the fourth quarter, as a number of blue chip tech stocks stepped into this space. Despite a rather red day for the Nasdaq Composite, these tokens are reestablishing their prominence as high-growth tokens worth owning through volatility.
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For Decentraland, today’s crypto metaverse winner, surging digital real estate sales during Q4 have driven interest in this platform’s MANA token. Recent reports that users on other play-to-earn crypto metaverse games such as Axie Infinity are now renting out their non-fungible tokens (NFTs) have shed more light on this sector. Enjin Coin, a key player in developer-focused infrastructure for NFT integration into the metaverse, has surged alongside these other gaming-related tokens today.
So what
Digital real estate sales and in-game NFT purchases continue to roar higher. Despite the volatile market conditions, there are a number of bullish arguments for why these tokens are worth considering right now. For those truly bullish on both developer and user growth in this space, these top metaverse cryptos are ones to consider right now.
However, there’s also a viable bearish argument to holding any of these tokens. Speculative interest has driven the valuations of these cryptocurrencies sky-high in a very short amount of time. As portfolio de-risking continues, there’s a high probability that the tokens that soared the most could drop the furthest in a risk-off environment. How risk-averse investors turn out to be over the near term is likely to drive the price action of these tokens for now.
Now what
Those seeking capital preservation and a safe place to hide may want to look elsewhere for growth right now. Market sentiment has shifted considerably, and these metaverse tokens are all down meaningfully from their highs. As mentioned, it’s possible this rout could continue and today’s rise could be a temporary blip on a longer-term bearish chart.
However, there’s also the possibility that the metaverse will remain one of the key growth areas investors tend to focus on, despite overall market movements. Time will tell. Personally, I’m sitting on the sidelines with these tokens, waiting for a better entry point.
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.
