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 (AXS), The Sandbox (SAND -1.98%), and Enjin Coin (ENJ -0.28%) 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 (META -0.52%) 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.
Image source: Getty Images.
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.
