Metaverses, such as Decentraland, are tipped to become the next phase in the development and progress of the internet.
Since its launch in February 2020, it has continued to grow its user base and establish itself within the top three Metaverses that exists today.
The Decentraland (MANA) price has been hovering between $0.60 and $3 for the past year, but can it reach $100?
Decentraland will need to increase its value by 10,000%, or 100x, to reach $100.
This may sound an incredibly large value but considering Shibu Inu increased by 142,000% between 2020 and 2021, it may not be as farfetched as it first appears.
We recently wrote an article as to whether Polygon MATIC could reach $100 and the challenges it faces breaking through, but Decentraland could have an easier journey to reach $100 and is much more possible.
Despite both Decentraland and Polygon MATIC having similar coin prices the key factor is the market capital.
Market capital is the biggest deciding factor as to whether a cryptocurrency has the potential to 100x its current price.
Bitcoin managed to increase its price from a low of $0.09 to a high of $51,000, and Ethereum managed to increase its price from a low of $0.81 to a high of $4,300.
Based on these price increases, it seems feasible that MANA, the cryptocurrency behind Decentraland, could increase from $0.70 to $100.
But ultimately, it’s the market capital that needs to be analyzed to see the true potential.
Market Capital in Cryptocurrency
The market capital in cryptocurrency is the calculation of current price multiplied by number of circulating tokens. It provides the most accurate valuation of a cryptocurrency and allows investors to draw comparisons to other cryptocurrencies on the market.
It can be shown more simply using the calculation:
Market Value = Number of tokens in circulation * Trading Price
It is the single most important piece of data to look the potential of a 100x return on investment.
A very high market capital, even with a low trade price, indicates growth of this type of magnitude is very difficult.
A very low market capital, even with a high trade price, indicates it at least has the potential for large growth and very high returns.
This of course is subject to the success of the cryptocurrency and its ability to attract a large volume of investors.
Let’s look at this using an example.
A cryptocurrency with 1,000,000 circulating coins may have a trade value of $10 a coin, giving this cryptocurrency a market share of $10,000,000.
Another cryptocurrency with 1 billion circulating coins may have a trade value of $1 a coin, giving this cryptocurrency a market share of $1,000,000,000.
Although the second cryptocurrency has a current price of $1 compared to the first cryptocurrency of $10, it is the $10 cryptocurrency that is worth less.
100 times less in fact.
It will be considerably easier for the first coin to increase 100 times in value to become worth $1,000 and have a market capital of $1billion than it will for the second coin to increase 100 times in value, become $100 a coin, but have a market capital of $100billion!
Market capital is a better indicator of potential future growth when comparing against other cryptocurrencies, than the value of the coin.
Market Capital of Decentraland
The market capital of Decentraland does vary based on the current price of the MANA cryptocurrency, but as of time of publishing it stands at $1.65billion.
This is a reasonable size market capital for a cryptocurrency.
It is big enough to see many crypto investors have already bought in to the idea of the Decentraland Metaverse, and purchased MANA, but if the Metaverse is expected to take off in the way many speculators believe, a 100x – or 10,000% – increase is not out of the realms of possibility.
If Decentraland’s MANA did increase to $100 it would make it the third biggest cryptocurrency in the market, but it would still be quite a way behind Ethereum’s market capital, and considerably behind Bitcoin’s market capital.
This it least gives MANA and Decentraland an opportunity to reach a $100 price without it being a completely unrealistic target.
To understanding the influence market capital has on the potential of large-scale returns, it’s important to understand why market capital is so important.
Why Market Capital is Important
Current cryptocurrency price cannot be used as a determining factor as to whether it could potentially 100x.
In fact, it is almost completely irrelevant.
For example, if crypto X has a current trading price of $1 but there are 100 billion coins in circulation it will have a much harder time increasing to $2 compared to the chances crypto Y has increasing from $1 to $100 which has a current circulation of 100 million coins.
This is because of the amount of money within the overall market and the amount already invested in to the crypto.
In the example above crypto X already has a valuation of $100billion, which would make this crypto the third most valuable on the market.
Whereas crypto Y only has a valuation of $100million.
If crypto Y began to gain traction and started to see substantial gains, the market would shift and potentially sell their holding of crypto X in exchange for crypto Y, seeking a higher return.
Just 10% of the amount held of crypto X being sold off and moving into crypto Y would see crypto Y increase 10,000%, or 100x.
On the other hand, all holders of crypto Y could sell and move this amount in to crypto X, and crypto X would increase by just 0.1%.
Therefore, a cryptocurrency with a much smaller market capital has a much better opportunity of increasing significantly if demand increases, and money moves across from other cryptocurrencies.
To understand whether Decentraland MANA can reach $100 let’s compare its market capital with other cryptocurrencies.
Decentraland MANA Market Cap vs Other Cryptocurrencies
Here is a table showing how the Decentraland MANA cryptocurrency compares to other top coins such as Bitcoin, Ethereum, Solana Dogecoin, Shibu Inu, Polygon MATIC and The Sandbox:
For Decentraland to reach $100 it would need a market capital the size of $165billon and become the third largest cryptocurrency on the market.
Unless more money entered the market it would require a significant reduction of either Ethereum or Bitcoin, or both, to push Decentraland to this size in value.
Although for most cryptocurrencies this is unlikely without a significant announcement or shift in the industry, the Metaverse is often quoted as being the next version of the internet and is expected hundreds of millions or even billions of users will join.
If this is achieved, and Decentraland emerges as the dominant Metaverse, reaching a valuation of $165 billion and reaching a $100 price could certainly be achievable.
Could Decentraland Reach $100
If Decentraland becomes the market leader of the Metaverse industry, then it is very possible investments could move from other cryptocurrency, or even stocks and shares, and increase the market capital of Decentraland which could see the price of Decentraland reach $100.
The Metaverse industry is incredibly early, and although Decentraland, The Sandbox and Meta are the frontrunners there are other huge corporations or even new start-ups that could enter and dominate the market.
There is speculation here and increasing 100x is not going to happen overnight but analyzing the Decentraland’s market capital compared to other crypto, and the money invested in the cryptocurrency already, it is at least possible.