The Sandbox (SAND -1.02%) topped $8 last fall when cryptocurrency markets were soaring. The total value of the market had reached more than $3 trillion in November. It's since declined to about $1.3 trillion, according to Statista. The Sandbox likely benefited somewhat from the general market momentum -- and today, trading for less than $2, it is suffering along with the market too.

But Sandbox-specific reasons also drove the cryptocurrency's initial gains. And those reasons remain valid today. Could they push The Sandbox back to its peak of more than $8? Let's find out.

A person looks into a virtual reality viewer and smiles.

Image source: Getty Images.

A player in the metaverse

First, a little background. The Sandbox is a player in the increasingly popular metaverse. The metaverse is all about creating virtual worlds where you can buy land and seek out the same sort of experiences -- such as entertainment -- that you find in the real world. My colleague Kristi Waterworth recently wrote about a Citi report predicting big things for the metaverse by 2030: namely, an $8 trillion to $13 trillion market opportunity.

How can The Sandbox benefit? The Sandbox is a virtual world built on the Ethereum blockchain. To buy assets in this virtual world, players use the token "Sand." Investors also can buy tokens for investment purposes only.

The Sandbox is already carving out its space in the metaverse. It's been selling virtual land to the public for more than a year. And it has attracted some pretty big buyers. For example, rapper Snoop Dogg not only bought land in The Sandbox -- but he's also inviting players to join his "Snoopverse" through access passes and party passes. The Sandbox is a play-to-earn experience. That means when you invest in land or other assets in the game, you truly own them -- and may eventually resell them. So, for players, there's a real incentive to dive in and participate.

Two Alpha events

Though The Sandbox saw big gains in value last year, the increases may not be over. That's because The Sandbox is in the early stages of its growth story. The platform has held two Alpha events that allowed a limited number of players to experience all The Sandbox has to offer. The latest -- Alpha Season 2 -- resulted in more than 325,000 Alpha hub visitors. The Sandbox is now registering participants for Alpha Season 3.

According to The Sandbox roadmap, there's a lot more to come: the first virtual concerts and a mobile version launch later this year, for example. All of this means there are plenty of catalysts to eventually push the value of The Sandbox higher.

From a token supply perspective, too, The Sandbox could reasonably reach $8. Today, the circulating supply totals about 1.2 billion tokens. So, such a gain would equal a market value of $9.6 billion. Right now, that would make The Sandbox the 12th biggest cryptocurrency by market capitalization.

Of course, The Sandbox faces the risk of competition. It's not the only player in the metaverse. And though some analysts are optimistic about the metaverse in general, it still is a new area. It may not take off as expected. So only invest what you can afford to lose. That said, The Sandbox has the right elements to carve out a solid spot in the metaverse. As a result, it could make it back to the level of $8 -- or even higher down the road.