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Here's Why Arweave Soared on Solana's $100 Million Headline

By Jon Quast – Nov 5, 2021 at 1:50PM

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This move isn't a pump -- it's the result of growing real-world adoption.

What happened

Arweave (AR -2.01%) is a relatively small cryptocurrency but gaining in popularity, especially over the past week. It's up roughly 50% over the past seven days, according to data from CoinMarketCap.com. Seven percent of its gain has come over the past 24 hours, as of this writing. And this bump in price might have something to do with another cryptocurrency rising in popularity -- Solana (SOL -2.18%).

So what

Solana is down about 2% over the last 24 hours. But it's making headlines today because of a deal announced with FTX and Lightspeed Venture Partners. According to CoinDesk, the trio is investing $100 million in companies looking to build video games on the Solana blockchain.

A person looks happy and surprised with something they're looking at on a computer.

Image source: Getty Images.

The $100 million fund is getting used quickly. A gaming studio called Faraway is already the fortunate recipient of $21 million to fund its game Mini Royale

Arweave differs from Solana. Its purpose is to provide data storage in a decentralized way. In December, Solana picked Arweave to manage its data needs. Therefore, as Solana's adoption increases, so too does the importance of Arweave's services. And with $100 million to spend, it seems more games will be built on Solana, creating a favorable-use case scenario for Arweave.

Now what

The cryptocurrency space is huge and full of dubious investment opportunities. It's hard to know what to listen to and what to tune out. However, one can be discerning by looking for cryptocurrencies that are actually getting used more and more.

In this light, it seems that both Arweave and Solana are being adopted, as crypto-gaming gains in popularity. There's more to consider when analyzing these opportunities, but for now, this is a good sign for these two cryptocurrencies.

Jon Quast has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Solana. The Motley Fool has a disclosure policy.

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