What happened
The cryptocurrency market is posting gains in today's trading session, including big gains for many altcoins. Dogecoin (DOGE -0.27%), Shiba Inu (SHIB 1.67%), and The Sandbox's (SAND 0.93%) respective cryptocurrencies were up roughly 3.2%, 4.9%, and 12.2% as of 1:30 p.m. ET Saturday.
After some brutal trading in December and January, the cryptocurrency market has recently been regaining some ground. In addition to general recovery momentum, Amazon's strong Q4 results helped the Nasdaq Composite index close out Friday's trading session roughly 1.6% higher, and the buying trend appears to have extended to the cryptocurrency space.
Image source: Getty Images.
So what
Lately, cryptocurrencies have been impacted by many of the same catalysts that have shaped valuations in the stock market. It's been an especially lumpy earnings season for Big Tech companies so far, and the cryptocurrency market has seen big pricing swings that coincided with recent reports from Peloton, Netflix, Meta Platforms, Amazon, and others.
After Meta Platforms published disappointing Q4 results and guidance on Wednesday, investors sold out of tech stocks and risky investments. However, Amazon's stronger-than-expected Q4 report and guidance arrived Thursday and helped to quell concerns and coaxed investors back into growth-dependent and speculative stocks and cryptocurrencies.
Dogecoin is now up roughly 4% over the last seven days of trading, and Shiba Inu's token is up roughly 5.1% across the stretch. Meanwhile, The Sandbox's cryptocurrency has risen roughly 15.3%.
While gains for Dogecoin and Shiba Inu over the last week appear to be driven primarily by market momentum, The Sandbox's gains seem to be influenced by the evolution of its underlying metaverse platform. The SAND token cryptocurrency token has been climbing following the announcement of a non-fungible token project with Snoop Dogg and news that Warner Music Group had purchased virtual real estate in The Sandbox metaverse and plans to use it as a music-focused digital attraction.
Now what
Dogecoin, Shiba Inu, and The Sandbox have all managed to post incredible gains over the last year. Dogecoin's token price has climbed 172%, and The Sandbox's token price is up roughly 4,310%. Meanwhile, Shiba Inu has posted even more impressive gains, and its token is up roughly 211,000% over the last 12 months of trading.
Despite the token arguably having a more sound fundamental valuation case due to its connection to real estate and services in a metaverse world, The Sandbox remains the smallest of these three cryptocurrencies. The metaverse-focused token has a market capitalization of roughly $4 billion and is the 36th largest cryptocurrency by valuation. For comparison, Dogecoin is the 11th largest cryptocurrency by valuation and has a market cap of roughly $19.7 billion, and Shiba Inu has a market capitalization of roughly $12.7 billion and stands as the 15th largest token.
Shiba Inu is currently more similar to Dogecoin in the sense that it primarily functions as a speculative investment vehicle and digital currency, but it could eventually have more in common with The Sandbox. A metaverse built around the SHIB token is on track to launch this year, and some investors are betting that it could spur demand for the token.
There are also potential catalysts on the horizon that could help to drive adoption and demand for Dogecoin. Tesla CEO Elon Musk has taken up championing the DOGE as something of a pet project, and investors are hoping that Musk will make more moves to push the meme-powered token further into the mainstream.
While The Sandbox, Shiba Inu, and Dogecoin have individual opportunities and characteristics that could spur pricing gains, each token's performance will likely be largely shaped by broader-market valuation trends in the near term. For better or worse, investors should move forward with the understanding that cryptocurrency market is predisposed to volatile pricing swings, and these tokens are high-risk, high-reward plays.
