Crypto asset prices have been having a relatively calm day after dropping in value on Thursday. Despite all the red and green, prices have been range bound, especially for Bitcoin (BTC) and Ether (ETH), possibly due to competing narratives at work.
Since about mid-May, BTC has been trading in the narrow range of $25,800 to $27,600, while Ether has been consolidating between $1,750 and $1,850. At press time, Bitcoin and Ether changed hands at $26,409 and $1,814, respectively.
Amidst this, the world's largest crypto options exchange Deribit, which controls almost 90% of the market, will settle May expiry options on Friday at 08:00 UTC.
Often regarded as a hedge against macroeconomic factors, crypto isn't really immune to external abnormalities. This has been seen with the Federal Reserve increasing interest rates several times last year, which resulted in a dampened appetite for high-risk assets such as stocks and crypto. When interest rates rise, people move into cash, and when interest rates are lowered, people tend to shift from low-risk investments to high-risk ones.
However, lately, crypto markets haven't really been affected by solid economic data. Following job and productivity gains that signaled inflation is still high, and the economy is expanding, crypto markets have been falling for much of these past 18 months.
Just this week, the US Labor Department announced that 229,000 Americans had filed for unemployment benefits last week, which though 4k higher than the prior month, is well below 245,000 expectations. Meanwhile, the US economy grew, for the third consecutive quarter, by 1.3%.
A robust job market has been seen as an obstacle to reducing inflation by Federal Reserve Chair Jerome Powell, and elevated inflation remains a key concern for the FOMC. The FOMC minutes from its meeting earlier this month indicate that US central bankers expect to keep rates between 5%-5.25% through Jan. 2024.
While bankers have noted that the “cumulative tightening of monetary policy could affect economic activity more than expected,” they also expect a “mild recession starting later this year, followed by a moderately paced recovery.”
What's Happening with MANA Price?
So, while Bitcoin and the majority of altcoins are struggling, once a popular metaverse coin, MANA is also currently struggling to find any positive momentum. Down 0.8% in the past 24 hours, MANA has been trading at almost $0.463 while managing $54.4 million in trading volume during this period.
During the bull mania of 2021, MANA managed to hit an all-time high (ATH) of $5.85 but has since lost 92% of its value since then in tandem with the broad crypto market. It was at this time Grayscale Investments announced the launch of its Decentraland Trust product. The same year, famed auction house Sotheby's opened its first-ever virtual gallery in Decentraland.
But now, not only is the MANA price in the red by 6.6% in the past week, but also down over 18% in the past 30 days and 53.4% in the past year. However, the token has managed to record gains of 53.19% year-to-date (YTD).
These losses came after the positive last week, during which the price spiked as a result of several upcoming developments revealed by the project. For starters, the platform announced a partnership for a gamified store with NFTLabs. The same week, it hosted a metaverse party with popular DJ Dillion Francis.
Another recent positive development for MANA has been its virtual land being sold for $1,350, which is 1.34x the current floor price of 0.559999 ETH. Brands like Adidas and Atari have previously bought virtual land in this blockchain-based metaverse.
Meanwhile, a week ago, the token recorded almost double-digit gains following the rumors about Apple planning its very own metaverse, something the tech giant hasn't confirmed or denied. It hasn't been anything new, though, as Apple working on its own metaverse has been speculated on for some time now to compete with Meta's (formerly Facebook) Oculus series.
If Apple's device drops later this year, as rumored, then the price of metaverse coins like MANA could explode leading up to the event and beyond.
A Peek into the Decentraland World
MANA is the native token of the 3D virtual reality platform Decentraland, powered by the Ethereum blockchain. In this metaverse, users can create virtual structures such as art galleries, casinos, theme parks, and concert halls and charge other players to visit them.
Decentraland was launched in 2017 following a $26 million ICO, during which 40% of the token supply was sold publicly. Venture capital firm Fundamental Labs, venture capitalist George Burke, Animoca Brands, Genesis One Capital, Boost VC, Fabric Ventures, and Digital Currency Group are some of the investors in Decentraland.
The Decentraland Foundation, which is the organization behind the development of the Decentraland software and holds intellectual property rights, received 20% of the token supply. It was founded by Esteban Ordano and Ariel Meilich in 2015. The platform's founding members also got the 20% token supply, while the remaining 20% was allocated to building the community and funding partnerships.
While the project was launched during the last bull run, its test platform wasn't released until 2019 in a closed beta version and was only opened to the public in Feb. 2020.
The way Decentraland works is through three separate layers, as per its white paper. The consensus layer is for tracking ownership of land and virtual items within the game. Then there's a decentralized storage system called the land content layer for uploading assets and content. In the real-time layer, avatars communicate and connect with each other in-game.
MANA is the ERC-20-based in-game currency that plays a central role in the Decentraland world. Players can buy and sell in-game items like costumes for avatars using MANA through the Decentraland Marketplace, which is the go-to place to trade and manage all the on-chain assets. MANA tokens can also be converted into wrapped MANA (wMANA) by its holders, who can then deposit it into a DAO to gain the ability to vote on the future development of the virtual world.
There's another token called LAND, a non-fungible digital asset (ERC-721) divided into 16m x 16m parcels, further divided into Districts allowing users to create shared spaces. LANDs are purchased using MANA tokens and are owned permanently by community members.
State of Metaverse
MANA, however, is not the only metaverse coin struggling these past couple of years.
According to CoinGecko, the top metaverse coins are Internet Computer, The Sandbox, and Axie Infinity which have had a similar fate and are currently down 99.3%, 94%, and 95.86% from their respective ATHs.
Render (RNDR) is the only top metaverse coin performing well and is only down 68% from its peak. Overall the total market cap of metaverse coins stands at $8.18 billion while managing $656.5M in 24-hour trading volume as of writing.
As for what is metaverse, it is a synthetic virtual environment that runs parallel to the real world. It provides a 3D experience with the help of virtual reality (VR) headsets or augmented reality (AR) devices. It is predicted that the market share of extended reality (XR), an umbrella term that covers immersive technology, including virtual, augmented, and mixed reality, will reach $345.9 billion by 2030.
With 76% of global consumers saying that they depend on tech in their daily lives and a whopping 93% thinking that technology is the future, it makes sense that the metaverse can grow as much as a trillion-dollar market opportunity, as expected by some.
Meanwhile, research by Statista predicts a rapid spurt in global metaverse market revenue from $65.2 billion in 2022 to a tremendous $936.6 billion in 2030.
Currently, the main driving force behind the growth of the metaverse market is the increasing adoption of virtual reality (VR), augmented reality (AR), artificial intelligence (AI), and blockchain and digitalization in many different sectors of life, such as retail, fashion, art, healthcare, and others. Moreover, growing smartphone penetration and wide adoption of 5G technology can drive this growth further.
Even the giants like Meta and Microsoft have realized this and spent $10 billion and $70 billion correspondingly for metaverse and virtual world-building projects.
Interestingly, this week, Zhengzhou also released a draft to support metaverse companies operating in the Chinese city. A dedicated fund worth 10 billion yuan ($1.42 billion) will be established by the municipal government to foster growth and development in the industry.
According to the policy proposals, those metaverse companies headquartered in Zhengzhou can receive a startup capital investment of up to 200 million yuan ($28.34 million) and other benefits such as rent subsidies.
Meanwhile, any company that engages in the metaverse development use cases in the city, regardless of its headquarters location, will be able to receive up to 5 million yuan ($710,000) for each project certified as viable by the municipal government.
These policies apply to local enterprises operating in two areas related to metaverse technologies, including research endeavors such as VR, AR, and brain-computer interfaces and their utilization in real-world industries, such as education, commerce, and entertainment.
The municipal government of Zhengzhou also outlined its long-term vision for the metaverse development in the city, where it foresees metaverse-related industries in the region to achieve an annual revenue surpassing 200 billion yuan ($28.34 billion) by the end of 2025.
In addition, the government further plans to collaborate with other agencies and investment firms to secure 50 billion yuan ($7.08 billion) in funding to support various metaverse-related development projects. The plan includes blockchain, human-computer interfaces, next-gen computer rendering, and artificial AI and aims to create a digital asset market using NFT technology.
All this shows that the metaverse clearly represents a promising future and the potential to drive the growth of metaverse coins like MANA.