Investors in the popular metaverse cryptocurrency The Sandbox (CCC:SAND-USD) have lately been perplexed.
SAND had been a multibagger until late 2021 with a return of over 3000% over the last 12 months.
By comparison, major cryptocurrencies Bitcoin (CCC:BTC-USD), Ethereum (CCC:BTC-USD), and Binance Coin (CCC:BNB-USD) were up around 26%, 15%, and 993% in the same period.
So far, 2022 has been a different story for digital assets. Year-to-date (YTD) the altcoin lost more than 30%. Similarly, the global crypto market has been extending losses amid the U.S. Federal Reserve’s hawkish stance and increasing choppiness in equity markets. For instance, BTC shed close to 20% in January as well.
After these recent pullbacks, The Sandbox is currently trading at around $4 per token, down more than 52% from an all-time-high (ATH) of over $8.40 seen in November.
Meanwhile, other metaverse coins Axie Infinity (CCC:AXS-USD) and Decentraland (CCC:MANA-USD) also declined about 31%, and 24% YTD.
A recent study by asset manager Grayscale points out the metaverse could create a massive business opportunity with a yearly revenue of $1 trillion.
Though still in their early phases, the next-generation internet concepts including the metaverse, non-fungible tokens (NFTs), and Web 3.0 offer remarkably exciting prospects for platforms like The Sandbox.
Thus, once the crypto market sentiment improves, SAND could well be poised to the next rally. With a market capitalization (cap) of around $3.7 billion, The Sandbox currently ranks among the 40 largest cryptocurrencies. Let’s see if the digital asset can increase its ranking soon.
LAND Owners in the Sandbox
The Sandbox was launched in 2011 by the 3D game studio Pixowl, which was acquired by Hong Kong-based venture capital firm Animoca Brands in 2018. Its Ethereum blockchain-based play-to-earn (P2E) ecosystem enables users create and trade LAND, its digital real estate.
All transactions are done with the platform’s main utility token SAND, an ERC-20 token with a finite supply of 3 billion. Currently, there are about 920 million units in circulation.
The virtual world comprises of 166,464 LANDS, and more than 18,600 owners in the community. The number of active wallets, increased from around 4,200 to over 22,500 over the past 52 weeks, according to nonfungible.com.
The Sandbox targets an organic community growth of creators and supports them by giving 95% of the revenue when their non-fungible tokens (NFTs) sell. Also, it aims to achieve full decentralization within several years.
As such, the DAO (decentralized autonomous organization) is scheduled to launch around mid-2022. It will grant staking and voting rights for SAND and LAND holders.
The Sandbox Is Partnering With Other Brands
Over the past few months, a lot has happened in The Sandbox community. November started with Sandbox’s raising a $93 million fund from the venture capital group SoftBank (OTCMKTS:SFTBY) to ramp up growth.
Game developer GreenPark announced partnering with developer MetaVenture Studios and the NFT platform GrowYourBase to expand into The Sandbox as well.
Furthermore, digital real-estate fund Republic Realm bought a plot of land on The Sandbox for a record $4.3 million. In addition, the “Metaflower Super Mega Yacht” NFT sold for 149 ETH. It was was created by Republic Realm as part of its Fantasy Collection.
On Dec. 1, The Sandbox put virtual plots on the market, adjacent to the land where Snoop Dogg would build his mansion, the Snoopverse. An NFT collector already paid $450,000 to become the digital next-door neighbor, according to Decrypt.
In late-December, PricewaterhouseCoopers (PwC) Hong Kong announced acquiring LAND in The Sandbox. And, the crypto trading platform, eToro, started listing the SAND-USD token.
Meanwhile, after completing the Alpha multi-week gaming event, The Sandbox sponsored a tournament within the mobile gaming platform LootMogul. It took place between Jan. 15 – 31, and players were able to win SAND tokens worth up to $50,000.
Most recently, Animoca reported multiple partnerships with Hong Kong-based companies to launch a new Mega City project. Finally, Warner Music Group (NASDAQ:WMG) is working with the platform to create a music-themed virtual world for metaverse enthusiasts.
In total, the metaverse platform currently partners with over 165 brands, such as Adidas (OTCMKTS:ADDDY), rapper Snoop Dogg, The Walking Dead, The Smurfs, Care Bears, and Atari (OTCMKTS:PONGF).
The Bottom Line on SAND-USD
In hindsight, the recent downward in prices of most cryptos reminds retail investors that the cryptosphere is hardly exempt from broader market setbacks. Thus, despite the hype around the much-anticipated metaverse, SAND-USD remains a high-risk investment.
If The Sandbox retains momentum to grow and attract new users, or the broader crypto market reenters a bull phase, then the SAND token could possibly see significant returns in the coming months. For now, investors should remember that cryptocurrencies are likely to remain volatile in the near term.
On the date of publication, Tezcan Gecgil did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Tezcan Gecgil has worked in investment management for over two decades in the U.S. and U.K. In addition to formal higher education in the field, she has also completed all 3 levels of the Chartered Market Technician (CMT) examination. Her passion is for options trading based on technical analysis of fundamentally strong companies. She especially enjoys setting up weekly covered calls for income generation.