Hype around the metaverse drove NFT tokens up 42% in November, making it the best performing cryptocurrency sector
NFT-linked cryptocurrencies rose 171% in the September to November period, according to a report from the Kraken exchange seen by Insider.
The Sandbox
- NFT-linked cryptocurrencies stormed ahead in November, as investor interest in the metaverse surged.
- A basket of NFT cryptos rose 42% in November, making it the best performing part of the market.
- Sand, the native token of The Sandbox, shot up 330% in November, according to Kraken data seen by Insider.
NFT-linked cryptocurrencies were by far the best performing group of digital assets in November, according to new data from the Kraken exchange, rising 42% as interest in the metaverse surged.
The metaverse is a catch-all term for virtual worlds, where users in the form of avatars can play games, work, build things, or watch live events. Metaverses that use crypto technology such as Decentraland and The Sandbox have recently boomed in popularity.
In them, users can buy and sell non-fungible tokens that represent parcels of land, clothing, or even mega-yachts. A company last week bought a parcel of land for $4.3 million in The Sandbox.
Tokens that facilitate the trading of NFTs within these virtual worlds outstripped more traditional cryptocurrencies such as bitcoin and ether, according to a market report produced by analysts at Kraken and shared with Insider.
The 12 biggest NFT-linked cryptocurrencies rose 42% in November on average, when weighted by size, taking their three-month gain to 171%, Kraken said. Bitcoin fell 7% in November while ether rose 8%, according to Kraken's data.
"The relative outperformance can be explained, in part, by renewed demand for several NFT tokens that cater to 'the metaverse', [which] was one of the biggest themes of [November]," said analysts at Kraken Intelligence in the report.
Among the biggest NFT cryptocurrencies are mana, which is the native currency of the Decentraland metaverse, and sand, the native token of The Sandbox metaverse. Sand rallied 330% in November, Kraken said.
Both have been hit by the major sell-off in cryptocurrencies in recent days, however, as concerns about the Omicron coronavirus variant and Federal Reserve policy have rocked digital assets.
Yet many investors are excited about the metaverse and NFTs. Non-fungible tokens are unique digital assets, securely recorded on a blockchain, which represent ownership of items such as video clips, artworks and virtual clothing.
"I think what is super interesting for 2022 on the commercial side of crypto is NFTs," Steen Jakobsen, chief investment officer at Saxo Bank, told Insider on Monday.
He said NFTs could well become big parts of the music and art industries, which would give crypto technology a major commercial "use case."