Buy low, sell high, profit 10 to 100 times more than Bitcoin. Few(if any) coins in the top 50 list can realize this crypto dream, and while smaller tokens achieve this all the time, they fall as quickly as they rise.
What if there were an investment strategy that favors both short and long-term? To achieve low risk and high reward, it’s worth paying attention to Play2Earn (P2E) coins, including those in both game and metaverse projects.
It’s not uncommon for P2E coins to rise by 10 to 100 times in value as many have market caps below 100M. The metaverse isn’t going away. In fact, it’s only starting this decade). This gives investors, small traders especially the opportunity to lose small and win big.
P2E coins aren’t all low-risk/high-reward though. Only a few will make it big, and there’s no easy way to recognize them. Many don’t even exist yet, hence why investors should keep watching for new P2E coins.
What Are P2E Coins?
P2E coins are the tokens that power P2E business models. Unlike traditional currencies, P2E coins extend their value to digital economies. The video game industry, for example, is worth over $180B.
Yet that’s not even close to how valuable it can become. Despite positive projections, monetization has always been a challenge. Game studios need to manage regulations, competition, and microtransactions to keep developing.
By looking at how P2E coins solve these problems, it’s easy to explain why they’re booming.
- They run on decentralized blockchains.
- Players can play, buy, and earn cryptocurrencies regardless of age, identity, or country restrictions.
- Smart-contract chains introduce DeFi apps and NFT marketplaces which bring countless new business models.
P2E coins reward competitive players, allowing any skilled gamer to start from nothing and make a full-time income. This is money that they can use to improve in the game, trade for other coins, withdraw for fiat, and buy whatever these gamers want.
That doesn’t mean game studios are giving away money. They build crypto-game economies that incentivize players to put money back into the platform. In fact, most early games (such as Axie Infinity) require players to buy NFTs to play.
Every game platform has its economic system to stabilize prices. The best P2E coins so far are The Sandbox, Decentraland, Gala Games, Illuvium, Ultra, Vulcan Forged, and Sidus Heroes.
Why P2E Coins Can Go Up With Or Without Bitcoin
The 2022 crypto market cap is around 2 trillion. Bitcoin’s cap is close to a trillion, which is at least five times greater than the entire gaming industry. Judging by the numbers, P2E coin prices should react to major market movers like every other coin.
Yet they don’t. Why?
- They have low market capitalization, rarely above $200M in earlier stages
- Some game studios spend years on development before doing any marketing. Many current game coins aren’t different; They’re tradeable, but there’s no full-fledged game yet.
- Early P2E investors are communities for gamers, not traders.
- They are businesses with products, not just currencies.
- They integrate NFTs and features of the metaverse, which might be worth $5 to $30 trillion by the next decade.
Gamers won’t stop playing their favorite game if the market goes down. Most P2E coins have $50M to $200M caps. If they capture only 1% of that demand, not only will it multiply the coin price but also attract investors from other sectors.
Investors should also look for launchpads and infrastructure projects as well as P2E coins. It wouldn’t be surprising if one of the metaverse coins became the Bitcoin of P2E in the next 10 to 15 years.
How To Invest In P2E Coins
Unfortunately, most of these initiatives are still in progress. Bitcoin still dominates the markets today, which can wipe out even the best performing P2E coins. On smaller coins, prices have fallen as much as 99% in one week.
The market cycles regularly expose many coins that won’t perform well,. especially those relying on the earning side of P2E. Only a few coins overcome this influence, which is the P2E coins that reinvest in the game and community.
Given there are so many games, finding profitable P2E coins requires some DYOR. Consider these aspects when looking into purchasing P2E coins.
- Definition: What’s the game about? What’s the selling point that sets it apart? Is it always updating, is it still in development?
- Reception: How long has it been around? What’s the market cap and audience growth so far? How active are the users when no major events are upcoming?
- Economy: What’s the entry barrier to play and earn? How can players reinvest in the game without it becoming pay-to-win? If cashing out weren’t possible, what would keep gamers playing?
These questions can help you find out which P2E coins will surge first once the gaming masses join crypto. While there’s no clear date for mass adoption, it might overlap with the crypto market cycle.
- When Bitcoin and Ethereum go up, investors will take profits and look for the next major coin that hasn’t moved yet, which is often among the top 20.
- Once the trend repeats on CoinMarketCap’s largest 20 coins, it extends to the top 50, 100, and eventually to micro-caps and NFTs.
- Small-cap tokens (which are most P2E coins) can surge exponentially for as long as the major tokens maintain the trend.
Play-to-earn studios can use this opportunity to gain visibility and long-term users. If they designed a good game and economy, by the end of the run, the new floor price should still be above the original price floor. Any changes to the game could reset the floor price back to a risky market cap of less than $50M.
There’s No Play-To-Earn Without Play
P2E coins solve some of the gaming industry’s challenges while introducing new ones. While it offers better ways to monetize games, players also need reasons to put money in. Otherwise, these tokens will lose value.
To find home-run games while avoiding rug pulls, investors need to look at P2E coins the way gamers do. Not just a money grind, but something worth playing for. It could be MMORPGs like Sidus Heroes, or it could be mobile games. P2E has a lot to offer to both investors and players, as long as P2E doesn’t become E2P.
“Gamers are a strong community but they are not always interested in making profits. Then again, the DeFi community is a very strong one also and they are not always interested in gaming. We are uniting these two very supportive and involved groups and are trying to provide an interactive and entertaining space that satisfies the needs of both groups.” — Dan Khomenko, CEO of Sidus Heroes