Metaverse cryptocurrencies have been red-hot in recent weeks. This market is largely undefined so far but holds the promise to revolutionize social networking, communications, gaming, entertainment, and many more fields. Are metaverse-related tokens ready for prime time as investment vehicles, or is it better to let the overheated sector cool off first?

Read on to see how two of our cryptocurrency writers treat the metaverse tokens in this early stage.

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New stores of value bring high potential for gains

Jennifer Saibil: The metaverse has exploded from a base of crypto enthusiasts to a mainstream audience of investors looking for ways to grow their money. Even novice investors may want to get in on the action as cryptocurrency prices have skyrocketed, platforms begin to stabilize, and crypto looks like it's here to stay. And while some of the more well-known cryptocurrencies like Bitcoin and Ethereum look to be slowing down, the biggest gains may lie in newer tokens, especially metaverse tokens.

Decentraland (CRYPTO:MANA) and The Sandbox (CRYPTO:SAND) are two of the more popular metaverse cryptocurrencies. They're both metaverse games, but they've become a lot more than that. Touted as "the first fully decentralized virtual world," Decentraland is a digital space owned by its creators. Users determine things like upgrades and fees, and transactions are placed using its native token, MANA. Where these cryptocurrencies get more interesting is in the ability to do more in this digital world, such as buy real estate on the platform and sell digital assets through their marketplaces. As this gains traction and more people get onboard, the reality is that they have value.

While it might look different than the kind of hard currency you're more familiar with, these tokens are real, and investors are benefiting. Is it risky? Yes. Should you invest your retirement account in them? I don't recommend it. But almost any investment that can deliver high gains will have a correlated risk factor. Remember, you can only lose what you put in. On the other hand, you can gain many times that amount. You might want to invest small amounts in some of the more stable metaverse cryptocurrencies and gain from their potential for explosive growth.

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Hold your horses in this rapidly evolving sector

Anders Bylund: Sure, the metaverse holds a ton of promise for long-term investors. However, it's far too early to pick winners in this race. Some of the early front-runners already fly much too close to the sun.

Decentraland and The Sandbox happen to be two of the clearest examples of this issue. Their prices have soared fourfold and sixfold, respectively, since October 27, just before Facebook announced its metaverse-focused strategy overhaul and changed its name to Meta Platforms (NASDAQ:FB).

I'm not saying that the metaverse tokens are worthless, but they look wildly overvalued right now. Their sky-high prices are fueled by speculation.

You know what master investor Benjamin Graham said about the stock market, right? In the short term, Wall Street is a popularity contest. But in the long run, it's a weighing machine.

The same notion is true for the cryptocurrency market. Right now, lots of inexperienced investors are picking up metaverse tokens based on their potential to find a useful place in the next-generation virtual reality world. The Sandbox and Decentraland hold a first-mover advantage here since they already offer fully functional virtual worlds. But the main driver of the metaverse idea is the company formerly known as Facebook, and that powerful entity has not yet defined its virtual reality future in terms of blockchain networks and cryptocurrencies.

So I'll gladly watch metaverse tokens from the sidelines until Meta Platforms starts talking about technical solutions. Any skyrocketing tokens that don't turn out to be a part of that plan will surely come back down in a hurry.

Should you buy metaverse tokens today?

There are pros and cons to picking up cryptocurrency tokens in the metaverse space right now. You should consider both the promised long-term returns and the risks along the way before investing your hard-earned cash in these exciting but risky tokens. You could also stay away until their surging prices cool down a bit, and then pounce on your favorite names. Only you know what level of metaverse cryptocurrency exposure is right for your portfolio.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning 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 richer.