The famous investor Warren Buffett once said, “Be greedy when others are fearful.” And with the market crypto down about 40% to $1.3 trillion year-to-date, now could be a good time for investors to shop around for quality assets that are trading at a discount. Let’s see why Avalanche (AVAX -2.25%) and The Sandbox (SAND -0.35%) should be on your radar.
Avalanche is a blockchain designed to host decentralized applications (dApps), self-executing programs that offer services on the network. Read also: This cryptocurrency that even crypto skeptics are snapping up. It has faced short-term headwinds due to its association with failed stablecoin platform Terra. But that challenge doesn’t kill its long-term growth thesis.
In early May, the cryptocurrency TerraUSD, which tracks the price of the US dollar, lost its peg, causing its companion token, LUNA, which was designed to absorb the volatility of the stablecoin, to collapse. Avalanche also suffered because the Terra developer, through the Luna Foundation Guard (LFG) (an organization that held digital assets to help support Terra parity), holds around 2 million AVAX tokens – which fuels fears that he could shed this position to pay real expenses such as taxes or possible litigation.
But with nearly 270 million AVAXes outstanding, the sale of LFG’s stakes is unlikely to have a significant impact on Avalanche, aside from some bad press. And investors should keep a long-term perspective.
Unlike most blockchains, Avalanche is naturally deflationary. The platform has a fixed maximum supply of 720 million AVAX tokens and burns (removing them from circulation) all of its transaction fees. So far, it has burned around 1.8 million units of AVAX worth $55 million. This mechanism should help drive the price of the token higher in the long term – although this depends on whether demand increases or remains stable, which is not guaranteed.
Is the metaverse an overrated vaporware or a unique investment opportunity? Only time will tell. But no matter how the concept evolves, blockchain technology is already playing a role in its development. See also: UAE Announces New Law to Regulate Cryptocurrencies and NFTs. Investing in The Sandbox is a great way to bet on this trend due to its first mover advantage in the sector.
Some major financial institutions are optimistic about the metaverse. CitiBank analysts estimate the opportunity could be worth a staggering $13 trillion by 2030, becoming the “next generation” of the internet. Cryptocurrencies like The Sandbox are well positioned to take advantage of this trend through technologies like non-fungible tokens (NFTs), which are a secure way to establish ownership of digital assets.
The Sandbox has a portfolio of over 166,000 digital real estate parcels called LANDS, where individual users can build games and other digital experiences. And because it is one of the first cryptocurrency projects to show tangible progress in building a blockchain-based metaverse, it has garnered significant real-world interest.
In May, the Dubai Virtual Assets Regulatory Authority announced plans to open a seat within The Sandbox to engage with cryptocurrency-related businesses looking to operate in the jurisdiction. This is a massive vote of confidence in the platform that could attract more investment.
Investing in a bear market is tricky because it is difficult to identify the bottom of the wave. See also: EBay plans to support cryptocurrencies for payments. But time in market is usually more important than market timing. And while investors may want to wait a few months for the dust to settle, Avalanche and The Sandbox could be excellent long-term bets due to their unique designs and expanding market opportunities.
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