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Despite the bearish crypto world, metaverse tokens are up 400%

Metaverse tokens have outperformed almost every crypto subcategory in the present bear market, rising roughly 400% yearly.

What are the statistics?

According to statistics from Kraken Intelligence and CoinGecko’s May 2022 market analysis, Decentraland (MANA) is up 41 %, Sandbox (SAND) is up 470 %, Axie Infinity (AXS) is up 511 %, and STEPN (GMT) is up 746 %. Tokens in the Metaverse could be used to pay a fee, purchase land, and participate in governance.

The next greatest category for year-over-year gains was exchange tokens, which increased by 6%. All other categories witnessed negative price movement in the same period, ranging from -13 % for Bitcoin to -72 % for DeFi.

Sectorwise breakdown of various blockchain entities. Source: Kraken

So far in 2022, blockchain-based gaming employing nonfungible tokens (NFT) & Metaverse systems has been quite popular. According to statistics from decentralized app (Dapp) tracker DappRadar, despite falling pricing across the sector, users among such games have stayed stable at around 1 million users per day.

Daily user count. Source: DappRadar
Daily user count. Source: DappRadar

Although daily users were steady in May, “NFT volume suffered a huge reduction with daily volume decreasing -87.1 %,” according to the Kraken study.

The last three months have been negative across all segments.

Over the past 30 and 90 days, every category examined by Kraken’s analysis, including Metaverse and trading tokens, has seen negative returns. Metaverse coins have been among the poorest performers in the last 30 days, falling 42 % and having the most volatility at 173 %.

Despite the short-term price movement, money is flooding into the sector to fund it. According to DAppRadar’s Q1 games report, $ 2.5 billion was raised in the first quarter of 2022 to support blockchain games and Metaverse initiatives. Investors were willing to finance games, according to the research, because gaming DApps accounted for 52 % of all blockchain activity:

“At this rate, play-to-earn and Metaverse-related ventures will generate $10 billion in revenue this year, ensuring the industry’s survival.”

Layer-1 tokens like Solana (SOL) and Cardano (ADA) were the biggest losses, falling by -53 % in the last three months and -43 % in the last month. They have high volatility, too, at 151 %.

Over all three time frames assessed by Kraken, Bitcoin (BTC) and Ethereum (ETH) showed relatively minor losses compared to altcoins. BTC has shown a yearly loss of -13 %, a three-month loss of -27 %, and -17 % in the last month, with the least volatility among all the comparisons. Ethereum has been slightly more volatile than Bitcoin, clocking a -97 % volatility. ETH lost -25 % last year, shedding -34 % in the last three months and -17 % last month.

Current technicals

At the time of press, Bitcoin was trading at $ 30,360, up by 3.75 % in the last week. Ethereum was changing hands at $ 1,800. Solana retails at $ 39.3, up by 2.5% in one week. Cardano is up by 12 % in the last week, trading at $ 0.63.

Among these, BTC and ETH are still consolidating in a tight range. Solana is egging down while Cardano has given a break out from its consolidation range.