CRYPTO MARKET 2025 · First Look of the Year

In 2025, the crypto world could experience significant shifts following the approval of Bitcoin and Ethereum spot ETFs, with potential ETFs for Solana (SOL) and XRP also in the pipeline. These developments may lead to increased institutional adoption, enhanced market liquidity, and broader acceptance of cryptocurrencies as legitimate investment vehicles.

The implementation of the Markets in Crypto-Assets Regulation (MiCA) in the EU is set to establish a comprehensive regulatory framework, providing clarity and fostering innovation while ensuring consumer protection. On a global scale, international regulatory efforts could harmonize rules, reducing risks associated with jurisdictional arbitrage but also introducing stricter compliance requirements for crypto businesses.

The inauguration of Donald Trump as President of the United States on January 20 could bring new dynamics to the regulatory landscape. His administration’s policies on crypto may impact the SEC’s stance, potentially favoring deregulation or reshaping enforcement priorities.

These factors, combined, could drive innovation and growth in the crypto industry but also create volatility and uncertainty as markets adapt to the evolving regulatory and political environment.

But today at BELOBABA, we're going to talk about crypto technology, without talking about the big cryptocurrencies…

The Metaverse: A Visionary Rebirth in 2025

As the curtains of 2025 lift, it’s tempting to look at the metaverse and assume its story has faded. Headlines may have shifted elsewhere, but beneath the surface, a quieter, deeper revolution has been unfolding. The metaverse is not just alive—it’s evolving, preparing for a future more expansive and transformative than its early iterations.

At BELOBABA, we believe the metaverse is poised to emerge as one of the most powerful drivers of the digital economy, with its synergy of blockchain, artificial intelligence (AI), and decentralized finance (DeFi) forming the backbone of this rebirth. This first report of the year aims to shed light on why the metaverse is far from dead and what we anticipate lies ahead.

From A to F words…

A.??? AI-Optimized Virtual Marketplaces

AI will power smart and adaptive virtual marketplaces within the metaverse. These marketplaces will function as hubs for buying, selling, and trading digital assets like NFTs, virtual real estate, in-game items, and services.

• Personalized Shopping Experiences: AI algorithms will analyze user preferences, purchase history, and behavior to offer tailored recommendations for virtual goods and experiences. For example: AI might suggest rare NFTs or custom avatars that align with a user’s interests. Machine learning models could analyze trends across the metaverse to predict and recommend high-value assets.
• Dynamic Pricing Models: AI will enable real-time price adjustments based on demand, scarcity, and market activity. Combined with blockchain’s transparency, this will ensure fair trading conditions and prevent manipulation.
• Fraud Prevention: Blockchain ensures the authenticity and provenance of digital goods, while AI-powered algorithms detect and flag suspicious activities, such as counterfeit items or malicious transactions.

B. Cryptocurrencies as the Backbone of Virtual Economies

The metaverse will heavily rely on cryptocurrencies for seamless and borderless transactions. AI’s role here is twofold: optimizing the underlying tokenomics and managing transaction flows.

• Tokenomics Design: AI can analyze user behavior and economic activity to design token ecosystems that promote healthy economic growth. For instance: It can recommend optimal staking rewards or inflation rates. AI simulations could predict the impact of economic changes, such as introducing new tokens or modifying transaction fees.
• Transaction Optimization: By leveraging AI, metaverse platforms can streamline crypto transactions for speed, cost efficiency, and reliability. AI algorithms will: Predict congestion on blockchains and recommend the best time to perform transactions. Adjust transaction priorities dynamically to reduce gas fees, especially in networks like Ethereum.

C. AI-Generated Virtual Goods and NFTs

AI will democratize the creation of digital assets by enabling users to design unique virtual goods without requiring advanced technical skills. These goods, minted as NFTs, will form the backbone of metaverse economies.

D. AI-Driven Economic Models in Virtual Worlds

• Custom Creation: Users could describe their vision for a virtual item (e.g., a house, vehicle, or wearable), and AI tools would generate unique, high-quality designs in real-time. Blockchain ensures that these creations are minted as NFTs, guaranteeing their uniqueness and ownership.
• Virtual Real Estate Development: AI will assist users in creating and optimizing virtual real estate. For example: AI could analyze market trends and user behavior to suggest the best layout or features for a digital property. It could also optimize properties for specific functions, such as hosting virtual events or facilitating commerce.
• Evolving Assets: AI could also enable dynamic NFTs—virtual assets that evolve over time based on user interactions, achievements, or market conditions. For example, a virtual sword might gain new abilities the more it’s used in a game.

D. AI-Driven Economic Models in Virtual Worlds

AI can manage and fine-tune the economic systems of metaverse platforms, ensuring balance, sustainability, and user engagement.

E. DeFi Meets the Metaverse: Financial Tools and Services

• Dynamic Resource Allocation: AI can analyze economic activity within the metaverse to allocate resources efficiently. For instance: In gaming metaverses, AI might adjust the availability of rare items or resources to maintain balance between scarcity and utility. In social metaverses, AI could optimize rewards for creators based on user engagement metrics.
• Incentivizing User Participation: AI can develop incentive structures that encourage users to spend time and resources within the metaverse. These could include: Gamified reward systems where users earn tokens for completing tasks or contributing to the community. Adaptive engagement strategies where AI offers personalized challenges or experiences.

E. DeFi Meets the Metaverse: Financial Tools and Services

Decentralized Finance (DeFi) will integrate seamlessly into the metaverse, offering users a suite of financial tools directly within virtual worlds. AI will enhance the efficiency and user experience of these services.

• Lending and Borrowing: Users could collateralize their virtual assets (e.g., NFTs, land) to access crypto loans. AI algorithms will: Assess the value of these assets in real-time. Mitigate risks by analyzing market volatility and historical trends.
• Yield Farming and Staking: AI will guide users toward optimal staking and farming opportunities in the metaverse. For instance, it could: Predict which protocols offer the best returns based on historical data. Dynamically adjust staking rewards based on user engagement and market conditions.
• Insurance Services: Blockchain-based insurance products in the metaverse will rely on AI to: Analyze risk factors for virtual assets and events. Automate claim approvals and payouts using smart contracts.

F. Real-World Integration: AI Bridging the Physical and Virtual Economies

AI will enable seamless interaction between the metaverse economy and the real-world economy, further blurring the lines between virtual and physical spaces.

• Tokenizing Physical Assets: AI and blockchain will work together to tokenize real-world assets (e.g., real estate, luxury goods) for use in the metaverse. Users will be able to trade, lease, or showcase these assets within virtual environments.
• Payment Gateways: AI will facilitate cross-platform payment solutions that allow users to easily convert between metaverse tokens and real-world fiat currencies, fostering broader adoption.
• Hybrid Events and Commerce: AI will optimize hybrid experiences where users can interact with both virtual and physical products. For example: A virtual storefront in the metaverse could sell physical items, with AI managing logistics and personalization.

DESCENTRALAND (MANA)

MANA is the native cryptocurrency of Decentraland, operating as an ERC-20 token on the Ethereum blockchain. It serves multiple purposes within the platform:

1. Currency: MANA is used to purchase virtual land (LAND), items, and services in Decentraland.
2. Governance: Holders of MANA can participate in the platform's governance through the Decentraland DAO, voting on key proposals and decisions.
3. Burn Mechanism: When MANA is spent to buy LAND, it is burned, reducing the overall supply and creating a deflationary effect.
4. Trading: MANA can be bought, sold, or traded on various cryptocurrency exchanges, making it a bridge between the real-world economy and Decentraland’s virtual economy.

In essence, MANA is the backbone of Decentraland's virtual economy and governance system.

DESCENTRALAND (MANA)

TA for MANA

MANA, the native token of Decentraland, experienced one of the most remarkable trajectories in the metaverse space during 2020 and 2021. These two years marked a period of significant expansion and growth for the project, with MANA capitalizing on the surge of interest in metaverses, NFTs, and digital assets in general. Below is a detailed technical analysis of MANA during these two key years.

The year 2021 was a turning point for MANA and for metaverses in general. During this year, Decentraland greatly benefited from the growing interest in virtual worlds and NFTs, especially after the boom of platforms like The Sandbox. As more users entered the Decentraland ecosystem, MANA experienced a strong rally that took its price to levels never seen before.

The 2021 Rally and more:

At the beginning of 2021, the price of MANA began to surge with strong bullish momentum, surpassing the $0.30 mark. This move was accompanied by a massive increase in transaction volume, reflecting growing interest from both retail and institutional investors.

The main support level during this rally was the $0.20 mark, which provided a protective level for buyers entering the early stages of the rally.

Currently, MANA is in a significant accumulation zone. After experiencing a sharp rise in 2021 and a subsequent correction, the price has stabilized within a range where investors are accumulating positions. This phase of accumulation is crucial, as it indicates that market participants are waiting for the right moment for the next upward movement.

In this accumulation zone, the price is often fluctuating within a defined range, as buyers and sellers reach an equilibrium. The sustained presence of demand at certain levels suggests confidence from long-term investors, and the gradual buildup of positions could set the stage for a potential breakout. As the broader market continues to develop, MANA’s price movement could eventually aim to revisit previous highs or explore new levels if the demand for Decentraland and the metaverse space continues to grow.

SANDBOX (SAND)

SAND is the native cryptocurrency of The Sandbox, functioning as an ERC-20 token on the Ethereum blockchain. It is a key element within The Sandbox ecosystem and serves several purposes:

1. Currency: SAND is used to purchase virtual land (LAND), assets, and services within The Sandbox metaverse.
2. Governance: SAND holders can participate in the platform's governance via a DAO, voting on decisions that shape the ecosystem.
3. Staking: Users can stake SAND tokens to earn rewards, such as additional SAND or in-game assets, while contributing to the network's security and liquidity.
4. Ecosystem Rewards: SAND incentivizes creators, players, and developers, rewarding contributions like creating content or engaging in the metaverse.
5. Marketplace Utility: SAND is used in the platform’s marketplace for trading NFTs, such as custom avatars, virtual items, and LAND.

SAND is the foundation of The Sandbox’s vibrant virtual economy, fostering creativity, community engagement, and decentralized governance.

TA for SAND

SAND, following its impressive rally in 2020 and 2021, experienced a considerable retracement, as it sought to consolidate a substantial portion of its previous gains. This correction is a natural phase in the market cycle, allowing the token to stabilize and absorb the excess volatility from the previous bull run, much like MANA. During this period of retracement, SAND has spent nearly two years in a prolonged consolidation phase, establishing a strong accumulation zone where a significant number of investors have likely built positions.

This accumulation period has been crucial for the token's long-term growth potential. It reflects a period of market digestion, where investors and traders wait for the next catalyst that could drive further adoption of The Sandbox metaverse, such as new partnerships, technological advancements, or broader market trends.

From this accumulation zone, SAND could be preparing for another attempt at revisiting its all-time high, driven by renewed demand and optimism in the metaverse and NFT spaces. If the broader cryptocurrency market continues its upward trajectory, and The Sandbox maintains its competitive edge in the metaverse landscape, SAND could break through previous resistance levels and embark on a new bullish phase. As such, this consolidation may serve as the groundwork for a potential breakout, with the possibility of reaching new highs and cementing SAND as one of the leading tokens within the metaverse ecosystem.

Legal Disclaimer?

This article, which continues the discussion on cryptocurrencies, is for informational and educational purposes only.

It does not constitute investment advice, nor should it be construed as a recommendation for the purchase or sale of any financial instruments/crypto.

The opinions expressed are solely those of the author and are not intended to predict future market movements or guarantee any specific investment outcome. Readers should conduct their own research or consult with a licensed financial advisor before making any investment decisions.

The author and publisher disclaim any responsibility for losses or damages arising from reliance on the information provided in this article.

Jesús Sánchez-Bermejo

BELOBABA