By now, everyone knows that Apple (AAPL 1.62%) is working on a mixed-reality headset that combines elements of virtual reality (VR) and augmented reality (AR). This headset, representing the company's first major product release since the Apple Watch in 2015, could be unveiled as soon as June 5 at the company's Worldwide Developers Conference (WWDC).
While the unveiling of the new headset would indeed be big news for Apple, it might be even bigger news for metaverse cryptos, which rallied earlier this year when rumors first began to surface about Apple's headset. So could an even bigger rally occur if Apple actually releases its new headset this summer?
Decentraland and The Sandbox
The two biggest beneficiaries of any metaverse crypto rally would be Decentraland (CRYPTO: MANA) and The Sandbox (CRYPTO: SAND). By market capitalization, these are two of the biggest metaverse cryptos and have been the focus of investor attention since the concept of the metaverse first broke into the mainstream in 2021.
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At that time, brands viewed metaverse worlds as a way to connect with digitally savvy customers and spent millions to create their own presence in these worlds. Investors snatched up parcels of virtual land, convinced that being part of the virtual land grab in these worlds was the path to future riches. However, neither Decentraland nor The Sandbox has ever been able to grow their user bases to the size and scale once predicted.
As a result, the price performance of these two metaverse cryptos has been abysmal, to say the least. While Decentraland is up 52% and The Sandbox is up 29% in 2023, that's really just a dead cat bounce. Decentraland is still trading at 92% below its all-time high of $5.90 reached in November 2021. And The Sandbox is trading at 94% below its all-time high of $8.44.
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What to look for with Apple
If Apple does announce a new mixed-reality headset at WWDC (the company's big shindig for developers), there are several things to look for. One, of course, is whether Apple actually uses the word "metaverse" in its launch presentation. If it does, that's a huge positive for metaverse cryptos. But given all the problems Meta Platforms has had with launching metaverse initiatives and the skepticism surrounding the term "metaverse" in general, it would be no surprise to anyone if Apple prefers to use terms like mixed-reality and VR.
The second thing to watch for is whether Apple launches its own metaverse world (the Appleverse?) for users of its mixed-reality headset. That would be a tremendous boost to the concept of stand-alone metaverse worlds. It would also be evidence that Decentraland and The Sandbox, though they couldn't make things work the first time, might be able to learn from Apple and come up with a much better user experience.
Right now, the consensus seems to be that Apple will focus on areas such as gaming, fitness, and sports. So these might be areas that Decentraland and The Sandbox could target for metaverse experiences.
A third factor to watch is the cost of the headset. This has always been one of the biggest knocks against VR headsets: They are just too expensive for the average consumer. Sure, hardcore gamers might be willing to shell out several thousand dollars for a premium VR experience, but who else is willing to do that? Apple has already sold us on the concept of the $1,000 phone, so this is probably the upper range of what most consumers would consider affordable.
Should you buy metaverse cryptos?
That being said, that Apple is actually thinking about getting involved in the metaverse is almost certain to boost the fortunes of metaverse cryptos. It might sound simplistic, but it's really just a case of a rising tide lifting all boats. If Apple can make the metaverse work at a relatively affordable cost, it will lift the fortunes of existing metaverse worlds.
Keep in mind that there is still plenty of money sloshing around the crypto markets that might decide to move into the metaverse. Right now, crypto investors are piling into highly speculative meme tokens. If Apple announces a mixed-reality headset, these same investors might be tempted to move that money into Decentraland and The Sandbox.
Of course, that's just the short-term case for investing in metaverse cryptos. Long term, there might be a rehabilitation of the metaverse concept and a rethinking of how to do the metaverse right. Maybe the best approach is based around a single niche segment rather than an entirely new world.
For now, I'm in wait-and-see mode. First, I want to see what Apple actually announces. Then, I'll see how that dovetails with what Decentraland and The Sandbox currently offer. In a best-case scenario, the new mixed-reality headset could be integrated into these metaverse worlds. That would be a tremendously bullish buy signal.
