Ethereum

Could Ethereum be the biggest winner in the Metaverse cryptocurrency?

Could Ethereum be the biggest winner in the Metaverse cryptocurrency?

Cryptocurrencies and the metaverse. It looks like a match made in investor heaven. Both could offer huge growth prospects over the next decade and beyond.

Unsurprisingly, investors are already placing their bets on the intensifying horse race among metaverse cryptocurrencies. There could, however, be a dark horse in the competition. could Ethereum (ETH 2.94% ) to be the biggest winner of all metaverse cryptocurrencies?

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A common denominator

Financial services giant JP Morgan (JPM -2.25% ) predicts that the annual Metaverse market will reach $1 trillion. The company has already established itself in Decentralizedit’s ( MANA 2.26% ) Metajuku Shopping Center.

JP Morgan obviously sees Decentraland as a potential metaverse winner. In its “Opportunities in the Metaverse” report, the major bank also identified The sandbox ( SAND 1.60% ), Space Somnium (CRYPTO:CUBE) and Cryptovoxels as the main Web 3.0 metaverse worlds.

Other game pieces are also metaverse contenders. Axie Infinity (AXS 3.42% ) and Enjin Coin ( ENJ 1.46% ) particularly stand out. Even more could be on the way. For example, the developers of shiba inus ( SHIB 2.93% ) have ambitious metaverse plans.

There is a common denominator for all these metaverse cryptocurrencies – Ethereum. Decentraland, The Sandbox, Somnium Space, Axie Infinity, Enjin Coin, and Shiba Inu all have their own native tokens. But they are all built on the Ethereum blockchain. Cryptovoxels is also built on the Ethereum blockchain with purchases and sales made with Ether tokens.

A metaverse magnet

Why is Ethereum such a metaverse magnet? There are several likely reasons.

Perhaps the most important factor behind so many metaverse cryptocurrencies using the Ethereum blockchain is its widespread global adoption. More than 40 of the top 100 cryptocurrencies based on market capitalization are built on the Ethereum blockchain. Most of them have no connection to the metaverse.

But metaverse cryptocurrencies probably aren’t using Ethereum due to a digital form of peer pressure. The developers of these cryptocurrencies understand the benefits of the smart contract functionality supported by Ethereum. And they no doubt love that the Ethereum network has been around for several years.

Of course, metaverse cryptocurrency developers also realize the downsides of building on Ethereum, including high transaction fees. However, they do know that improvements are on the way with phase 2 of three of the major Ethereum upgrade scheduled for this year.

The biggest winner?

There is no guarantee that the Ether token will be the biggest gainer in the metaverse cryptocurrency despite so many competitors using the Ethereum blockchain. Most of the major metaverse cryptocurrencies have easily outperformed Ether over the past 12 months. This trend could continue.

But it’s notoriously difficult to pick a winner in the early stages of a new technology. For example, there were many companies that investors invested money in when the internet started to be adopted. Many of them – even some that initially seemed particularly promising – no longer exist.

As was the case with the internet, however, the metaverse will not be a zero-sum game. There will be multiple winners. Ethereum may not be the biggest winner of all. However, with so many metaverse cryptocurrencies using its blockchain, it seems pretty sure to be at least one of the winners.

This article represents the opinion of the author, who may disagree with the “official” recommendation position of a high-end advice service Motley Fool. We are heterogeneous! Challenging an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and wealthier.