Written by: Yves, Head of Trading at Wirex
The Bitcoin price (BTC/USD) was eventually supported above the $60,000 level after diving yesterday to $56,425 (source Bitstamp). The market’s leverage is still high, the cost to hold Bitcoin futures is also high, and the selling pressure on Bitcoin is increasing as a consequence. As usual after a Bitcoin rally, investors are now looking to pick up alpha in altcoins instead: the Bitcoin dominance lost 3% in the last ten days. In contrast with a stalling BTC price, tokens like SHIBA (+152%), MANA (65.77%), ENJI (+37.3%) are booming this week.
Facebook’s CEO Mark Zuckerberg recently announced a rebranding of the company to “META”. He explained the move with his objective to launch a ‘metaverse’, a 3D virtual world that lives on a network. An investment of $10 billion is planned for this year alone on Facebook Reality Labs to create augmented reality and virtual reality devices and software. Mark Zuckerberg’s announcement slightly bumped Facebook’s stock price by 3.5% at the time of writing, but the price lost nearly 18% since the end of August, suffering from the revelations of the leaked Facebook papers.
The ‘META’ announcement bumped the prices of Decentraland’s native token MANA, and ENJIN. ENJIN has been providing several gaming projects (including metaverse-like projects) with an NFT economy where participants can trade NFT tokens that represent ownership of a virtual asset. Decentraland lets the user create a persona, acquire or exchange these virtual assets. The volume of exchanges on Decentraland’s NFTs is currently at $720k per week. Other projects like Cryptovoxels have an NFT exchange volume of $920k per week.
According to nonfungible.com, the number of NFT sales in the metaverse sector dropped significantly in October, reaching a high of 2,100 sales per day on October 10th, and showing now only 833 sales per day. The number is also far below the 14,000 sales per day reached in August this year.
Source https://nonfungible.com/market/history: metaverse number of NFT sales per day.
Facebook’s announcement will hopefully revive interest in the sector. At least it seems that it revived interest for the sector’s native tokens. Increased competition in an emerging sector is a bullish signal for this sector: it drives awareness, and eventually improves the overall demand.
The Ether price reached a new all time high today at $4,400 this week. It might have been partially boosted by the higher NFT expectations triggered by the Facebook rebranding: after all, an NFT is in most cases an ERC-721 token issued on the Ethereum blockchain. However, the Ether price was more likely boosted all week by a successful upgrade to the Beacon Chain, namely the “Altair Beacon Chain update”. This upgrade is one step further towards ETH2.0. It is actually the last upgrade of the Beacon Chain before transitioning to a proof-of-stake (PoS) protocol: an event known as “the merge”. As Ethereum’s website nicely explains:“Imagine Ethereum is a spaceship that isn’t quite ready for an interstellar voyage. With the Beacon Chain, the community has built a new engine and a hardened hull. When it’s time, the current ship will dock with this new system, merging into one ship, ready to put in some serious light years and take on the universe.”
After the merge, the sharding stage, potentially scheduled for the end of year, will spread the network’s operations across 64 new chains, increasing the maximum number of transactions per second. In other words, Ethereum on-chain transactions should be faster… and in turn improve the latency of every ERC-based protocol, including most of the DeFi projects.
Only six years after the launch of Ethereum, this transition, if successful, could easily stand as a reference for any cryptocurrency HODler. A HODler is most rightly convinced that he’s not just holding the potential of a coin appreciation; not (funnily enough) a seat on a space ship either; but mostly the potential of a team that has brought him that far in only 6 years.