Famous investor Warren Buffett once said, “Be greedy when others are scared.” And with the market crypto a decline of about 40% to $ 1.3 trillion year-to-date could now be a good time for investors to shop around for quality assets traded 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-propelled applications that offer services on the network. Also read: This cryptocurrency, which even crypto-skeptics snap up. It has been exposed to short-term headwinds due to its connection to the failed stablecoin platform Terra. But that challenge does not kill its long-term growth thesis.
In early May, the cryptocurrency, TerraUSD, which tracks the price of the US dollar, lost its bond, causing its companion token, LUNA, designed to absorb the volatility of stablecoins, to collapse. Avalanche also suffered because the Terra developer, through the Luna Foundation Guard (LFG) (an organization that possessed digital assets to help support Terra parity), holds about 2 million AVAX tokens – raising fears that he could drop this position to pay real expenses such as taxes or possible lawsuits.
But with nearly 270 million AVAXs outstanding, the sale of LFG’s holdings is unlikely to have a significant impact on Avalanche, other than some bad press. And investors should have a long-term perspective.
Unlike most blockchains, Avalanche is obviously deflationary. The platform has a fixed maximum supply of 720 million AVAX tokens and burns (removes them from circulation) all its transaction fees. So far, it has burned about 1.8 million units of AVAX worth $ 55 million. This mechanism should help drive the price of the token higher in the long run – although this depends on whether demand increases or remains stable, which is not guaranteed.
Is the meta-verse an overrated vaporware or a unique investment opportunity? Time will tell. But no matter how the concept evolves, blockchain technology is already playing a role in its development. Also see: The UAE announces new law to regulate cryptocurrencies and NFTs. Investing in The Sandbox is a great way to bet on this trend because of its first mover advantage in the sector.
Some large financial institutions are optimistic about the metaverse. CitiBank analysts estimate that the opportunity could be worth a staggering $ 13 trillion by 2030 and become the “next generation” of the Internet. Cryptocurrencies like The Sandbox are well positioned to take advantage of this trend through technologies such as non-fungible tokens (NFTs), which are a secure way to establish digital asset ownership.
Sandboxen has a portfolio of over 166,000 digital property packages 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 advances 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 in The Sandbox to engage with cryptocurrency-related companies wishing to operate in the jurisdiction. This is a massive vote of confidence in the platform that could attract more investment.
It is difficult to invest in a bear market because it is difficult to identify the bottom of the wave. Also see: EBay plans to support cryptocurrencies for payments. But time in the 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 can be excellent long-term bets due to their unique design and expanded market opportunities.
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