Metaverse-Related Assets Insulated From Cooling Risk Appetite, For Now

ndtv.com:

London: Global markets have had a rocky start to the year as the prospects of tighter monetary policy prompted investors to ditch risky assets - but the fast-growing world of "metaverse" investing has been running on its own timeline.

Metaverse-related assets such as currencies which can be used in virtual worlds, and NFTs representing virtual land, took only a small hit as risk appetite dropped in January, while the broader market for digital goods has seen volumes surge.

Facebook changing its name to Meta Platforms Inc proved a bigger driver of investment in the metaverse than broader financial market conditions.

Non-fungible tokens (NFTs) surged in popularity last year and this growth shows no signs of slowing, with sales on the largest marketplace, OpenSea, hitting a record $5 billion in January even as the tech-heavy Nasdaq posted its biggest monthly drop since 2018.

NFTs are a niche crypto asset which use blockchain to record the ownership of digital files such as images and video. Some enthusiasts see them as an integral part of a largely hypothetical version of the Internet, called the "metaverse", where property such as virtual land, clothing and artworks could be owned as a crypto asset.

A small number of enthusiasts have driven the volume growth. In the past month, there were around 400,000 active wallets in NFT markets on the ethereum blockchain, according to market tracker NonFungible.com - and one person can own multiple wallets, making volume data an unreliable proxy for demand.

METAVERSE TOKENS

As the prospect of the U.S. Federal Reserve hiking rates spooked investors in late January on the back of soaring inflation readings, bitcoin dropped too - counter to the theory that the highly volatile cryptocurrency