Why Gala (GALA) Is Up Over 34,200% This Year

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There's an investor frenzy around blockchain gaming.

Key points

  • Gala Games entered the top 50 cryptos by market cap after gaining 400% in November.
  • Gala is a gaming platform that uses the now popular play-to-earn model.
  • Investors should be cautious about buying in the hope of short-term gains.

Top coins like Bitcoin (BTC), Ethereum (ETH), Cardano (ADA), and Solana (SOL) have seen some impressive price action this year. But it's metaverse and gaming tokens that have stolen the show in recent weeks.

None more so than Gala Games (GALA), which is up an incredible 34,200% since Jan. 1, according to CoinMarketCap data. Gala has continued to grow in the past two months, in spite of a general downturn in crypto prices. It has gained 400% since the start of November, taking it into the top 50 cryptocurrencies by market cap.

What's behind Gala's price growth?

Gala is a blockchain gaming platform that uses the play-to-earn model popularized by Axie Infinity (AXS). It says its mission is to create blockchain games people want to play, and currently has one playable game called Town Star on its platform. Several others are in development.

Here are some of the reasons for its incredible price performance:

1. Blockchain gaming is booming

There are several reasons for the growth in blockchain gaming. One is the play-to-earn gaming model that rewards players for putting time and effort into the game. Before, gamers might spend hours earning points or upgrades in a game that then became worthless if it got shut down or they stopped playing. Now the in-game points and upgrades have monetary value. Tokens earned in game can be exchanged on cryptocurrency exchanges for fiat (traditional) money like dollars.

A second reason is the surge in attention for metaverses and everything connected to them. And a third is that several game creators have escaped Ethereum gas fees by moving to other platforms, making game play and development more affordable.

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2. Launch of Town Star game nodes

Town Star is a play-to-earn game in which users develop a town to farm competitively. It has over 600 million players and is Gala's flagship game. In November, Gala announced that players could buy licenses to run Town Star nodes -- essentially earning extra rewards for powering part of the game. Gala plans to introduce a new TOWN token specific to Town Star.

3. It got listed on Coinbase

The popular cryptocurrency exchange added GALA to its list of available cryptos in mid-November. Coinbase is one of the largest U.S. crypto exchanges, and Gala's price rose dramatically after the listing.

Should you buy?

Gala Games is riding the play-to-earn wave and has tapped into some important trends. It wants to create a platform that's fun, gives players control, and redefines blockchain gaming.

Not only do Gala players own the rewards and items they earn, but the platform is also community-led. Players have a say in which games get developed and what direction development takes. Its founders are well-known figures in the gaming and crypto space, and the business already has some interesting partnerships.

However, caution is always warranted in jumping on the latest trend or popular crypto -- especially with a coin that's already up over 34,200%. You have to ask yourself how much further it can realistically grow, and how much the price has been driven up by speculation.

Blockchain gaming may continue to grow in the coming years, but we simply don't know how it is going to evolve. It is such a new space that it's difficult to predict how big it will be, what shape it will take, and which games will prove successful. And there are a lot of crypto games out there. I counted over 30 in the top 500 cryptos by market cap, with many smaller games jostling for position lower down the table.

As with any investment, it is important to do your own research and only invest money you can afford to lose. Evaluate whether you think the price can continue to increase. Make sure you understand the competition and -- ideally -- actually play the game you're considering investing your money in. Most importantly, don't buy GALA because you're scared of missing out, or because you hope it will produce more short-term gains.

Bottom line

Right now, there's an investor frenzy around gaming and metaverse tokens. People are speculating that this is the next big thing and buying in the hope that these coins will jump. The trouble is that gaming is a competitive and fickle market -- like fashion or music. Even industry insiders have trouble picking the next big thing.

Gala Games may top the performance crypto charts right now, but the price seems inflated, and investors should think carefully before jumping on the bandwagon.

Our Research Expert