Meta's metaverse losses pour cold water on these 3 cryptocurrencies

It's an icy-cold day for anything metaverse-related.

| More on:
Crypto and NFT diagram.

Image source: Getty images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

sdf

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

What happened

The crypto market is certainly getting its fair share of lumps today. However, among the hardest-hit cryptocurrencies right now are those dealing in the metaverse. Top metaverse-themed tokens Axie Infinity (CRYPTO: AXS)The Sandbox (CRYPTO: SAND), and Enjin Coin (CRYPTO: ENJ) are down 5.6%, 4.8%, and 3.9%, respectively, over the past 24 hours, as of 1 p.m. ET.

These losses come as Facebook parent Meta Platforms (NASDAQ: FB) reported earnings today, which missed the mark across the board. Weak guidance and lower active user counts highlighted most investors' concerns. However, another key highlight of this report was the company's loss in its metaverse business -- of more than $10 billion. 

So what

Corporate adoption of the metaverse has, in many ways, made the otherwise conceptual virtual reality known as the metaverse a more tangible concept for the average investor to understand. However, these massive losses suggest that the expected rates of adoption among metaverse users isn't matching up to the investment dollars deep-pocketed Meta Platforms is putting up to generate growth.

For investors in these top metaverse-related tokens, that's being looked at as a negative right now. Sure, many crypto investors may view Meta Platforms as a potential threat in the metaverse (i.e., Meta's losses could be these cryptos' gains). However, until Meta's revenue can catch up to its expenses, it looks like the metaverse argument will be a tough one to sell to investors.

Now what

What does this mean for crypto investors? Perhaps more investment is needed to propel a blockchain-first metaverse forward. The rate at which Axie Infinity, The Sandbox, and Enjin can entice developers to come aboard may become a more important metric for investors to consider.

Additionally, user growth rates matter, and these platforms will need to show impressive numbers to wow investors in the face of massive corporate investment in this space.

Broadly speaking, most cryptocurrencies have followed equities much more closely in recent years, trading in higher correlation than what was seen in pre-pandemic times. For metaverse-linked tokens, Meta Platforms is certainly a benchmark to compare to. Today, that's not a good thing at all. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Chris MacDonald has no position in any of the stocks mentioned. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns and has recommended Meta Platforms, Inc. The Motley Fool Australia has recommended Meta Platforms, Inc. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on International Stock News

woman happy while charging her Tesla
International Stock News

Is Cathie Wood actually right about Tesla stock?

Here's the lowdown.

Read more »

A family sits on their couch, eyes glued to the television.
International Stock News

Could Netflix Stock Help You Become a Millionaire?

Netflix is now worth $520 billion, making it one of the world's most valuable businesses.

Read more »

Happy woman working on a laptop.
International Stock News

This AI stock has climbed 26,510%, and it's still a buy

Let's find out more.

Read more »

A man with a wide, eager smile on his face holds up three fingers.
International Stock News

Which 3 tech giants could cross the $3 trillion mark next?

Let's take a closer look at these three stocks and see what it will take for them to get there.

Read more »

Humanoid robot analysing the stock market, symbolising artificial intelligence shares.
International Stock News

Cathie Wood says if she could only invest in 1 artificial intelligence (AI) stock, this would be it (Hint: It's Not Palantir)

Let's dig into why this stock has earned so much confidence from Wood.

Read more »

Woman in business suit holds both hands out with a question mark above each hand.
International Stock News

Better core AI stock: Nvidia or Palantir Technologies?

Which of these top innovation stocks is the better buy as a core AI holding?

Read more »

A Tesla car driving along a road at sunset.
International Stock News

Prediction: This artificial intelligence (AI) stock could be the biggest winner of the second half of 2025

Let's take a look.

Read more »

Digital rocket on a laptop.
International Stock News

Prediction: After losing more than $1 trillion in market cap earlier this year, this monster artificial intelligence (AI) stock will become the most valuable business in the world by the end of the year

I'll explain why investor enthusiasm is on the rise and detail why I think the stock is poised for an…

Read more »