METAVERSE AND METAVERSE CRYPTOCURRENCIES (META COINS): BUBBLES OR FUTURE?

Abstract

Purpose- Metaverse is one of the blockchain-based digital assets developed in recent years. The concept of metaverse refers to an alternative virtual universe in which individuals are represented by their avatars (virtual representation), they can create applications, socialize, buy and sell goods and services, and share. In addition, there are meta coins, i.e. local crypto coins, used in the metaverse. In this study, the concepts of metaverse and meta coin, which have become popular recently, are explained, and the existence of price bubbles in MANA, the meta coin of the Decentraland digital reality platform, which has the largest market value among meta coins, is investigated. Methodology- The existence of price bubbles is investigated by the newly developed GSADF multiple bubble test. Findings- According to the result of the analysis carried out with the GSADF test, the existence of price bubbles in MANA prices in different periods has been determined. Especially the bubbles that have formed in the recent period have been realized as a longer term. This situation shows the impression that significant speculative movements have occurred in the MANA token recently. Conclusion- According to the findings, MANA prices are open to speculation. It is important for those investing or considering investing in MANA and other meta coins to consider the existence of bubbles in the respective token prices.

Keywords

• Price bubbles
• token
• cryptocurrency
• metaverse
• meta coin

References

1. Aharon, D. Y. & Demir, E. (2021). NFTs and Asset Class Spillovers: Lessons from the Period around the COVID-19 Pandemic. Finance Research Letters, 102515.
2. Aksoy, E. E. (2018). Bitcoin: Paradan Sonraki En Büyük İcat-Blockchain Teknolojisi ve Altcoin’ler. İstanbul: Abaküs Kitap.
3. Bouri, E. Shahzad, S. J. H. & Roubaud, D. (2019). Co-explosivity in the cryptocurrency market. Finance Research Letters, 29, 178-183.
4. Cheah, E. T. & Fry, J. (2015). Speculative bubbles in bitcoin markets? An empirical ınvestigation into the fundamental value of Bitcoin. Economics letters, 130, 32-36.
5. Cheung, A., Roca, E. & Su, J. J. (2015). Crypto-currency bubbles: An application of the Phillips–Shi–Yu (2013) methodology on Mt. Gox Bitcoin prices. Applied Economics, 47(23), 2348-2358.
6. Clemens, A. (2022). Metaverse for Beginners: A Guide to Help You Learn about Metaverse, Virtual Reality and Investing in NFTs. ISBN: 9798411296051.
7. Corbet, S., Lucey, B. & Yarovaya, L. (2018). Datestamping the Bitcoin and Ethereum bubbles. Finance Research Letters, 26, 81-88.
8. Corwen, S. (2021). Metaverse Investing for Beginners: A Simple Step-by-Step Guide to Crypto Art, Digital Assets in the Metaverse, Crypto Gaming and the Future of the Blockchain Technology. ISBN: 979-8403194655.

9. Cox, A. M. & Hobson, D. G. (2005). Local martingales, bubbles and option prices. Finance and Stochastics, 9(4), 477-492.
10. Davies, W. J. (2021). Metaverse Explained for Beginners: A Complete Guide to Investing in Cryptocurrency, NFT, Blockchain, Digital Assets, Web 3 & Future Technologies. ISBN: 9798776806384.
11. Diba, B. T. & Grossman, H. I. (1988). Explosive rational bubbles in stock prices? The American Economic Review, 78(3), 520-530.
12. Dowling, M. (2022a). Is non-fungible token pricing driven by cryptocurrencies? Finance Research Letters, 44, 102097.
13. Dowling, M. (2022b). Fertile LAND: Pricing non-fungible tokens. Finance Research Letters, 44, 102096.
14. Enoksen, F. A., Landsnes, C. J., Lučivjanská, K. & Molnár, P. (2020). Understanding risk of bubbles in cryptocurrencies. Journal of Economic Behavior & Organization, 176, 129-144.
15. Evrimagaci.org (2021). Metaverse Nedir ve Neden Çok Önemlidir? Yaşamlarımızı Dijital Bir Evrene Taşıyabilir miyiz?
16. https://evrimagaci.org/metaverse-nedir-ve-neden-cok-onemlidir-yasamlarimizi-dijital-bir-evrene-tasiyabilir-miyiz-11135 (Date Accessed: March 18, 2022).
17. Fry, J. & Cheah, E. T. (2016). Negative bubbles and shocks in cryptocurrency markets. International Review of Financial Analysis, 47, 343-352.
18. Gibson, W. (1984). Neuromancer. New York: The ACE Publishing.
19. Gonzales, D. (2021). Metaverse Investing: How NFTs, Web 3.0, Virtual Land, and Virtual Reality Are Going to Change the World as We Know It. ISBN: 9798792520660.
20. Güven, V. & Şahinöz, E. (2018). Blokzincir - Kripto Paralar - Bitcoin: Satoshi Dünyayı Değiştiriyor. İstanbul: Kronik Kitap.
21. Jalan, A., Matkovskyy, R. & Potì, V. (2022). Shall the winning last? A study of recent bubbles and persistence. Finance Research Letters, 45, 102162.
22. Kıyılar, M. & Akkaya, M. (2016). Davranışsal Finans. İstanbul: Literatür Yayıncılık.
23. Kyriazis, N., Papadamou, S. ve Corbet, S. (2020). A systematic review of the bubble dynamics of cryptocurrency prices. Research in International Business and Finance, 54, 101254.
24. Laeeq, K. (2022). Metaverse: Why, How and What.https://www.researchgate.net/publication/358505001_Metaverse_Why_How_and_What/link/62053bb0afa8884cabd70210/download (Date Accessed: April 18, 2022).
25. Mystakidis, S. (2022). Metaverse. Encyclopedia, 2, 486–497.
26. Nadini, M., Alessandretti, L., Di Giacinto, F., Martino, M., Aiello, L. M. & Baronchelli, A. (2021). Mapping the NFT revolution: Market trends, trade networks, and visual features. Scientific Reports, 11(1), 1-11.
27. Ordano, E., Meilich, A., Jardi, Y. & Araoz, M. (2017). Decentraland: A Blockchain-Based Virtual World. https://decentraland.org/whitepaper.pdf (Date Accessed: March 18, 2022).
28. Phillips, P. C., Shi, S. & Yu, J. (2015a). Testing for multiple bubbles: historical episodes of exuberance and collapse in the S&P 500. International Economic Review, 56(4), 1043-1078.
29. Phillips, P. C., Shi, S. & Yu, J. (2015b). Testing for multiple bubbles: limit theory of real‐time detectors. International Economic Review, 56(4), 1079-1134.
30. Phillips, P. C., Wu, Y. & Yu, J. (2011). Explosive behavior in the 1990s Nasdaq: When did exuberance escalate asset values? International Economic Review, 52(1), 201-226.
31. Russel, J. (2021). Metaverse for Beginners: A Complete Guide on How to Invest in the Metaverse. ISBN: 9798780501305.
32. Stephenson, N. (1992). Snow Crash. UK. Gardners Books. Bantam Books, USA, ISBN: 0-553-08853-X.
33. Stock, B. and Blockchain NFT Academy (2022). Metaverse: The #1 Guide to Conquer the Blockchain World and Invest in Virtual Lands, Nft (Crypto Art), Altcoins and Cryptocurrency + Best Defi Projects. ISBN: 9798796925973.
34. Su, C. W., Li, Z. Z., Tao, R. & Si, D. K. (2018). Retracted: Testing for multiple bubbles in bitcoin markets: a generalized sup ADF test. Japan and the World Economy, 46, 56-63.
35. The Sandbox Whitepaper (2020). https://installers. sandbox.game/The_Sandbox_ Whitepaper_2020.pdf (Date Accessed: March 18, 2022).
36. Vernaza, A., Armuelles, V. I. & Ruiz, I. (2012). Towards to an Open and Interoperable Virtual Learning Enviroment Using Metaverse at University of Panama. https://ieeexplore.ieee.org/document/6235458/metrics#metrics (Date Accessed: March 18, 2022).
37. Vidal-Tomás, D. (2022). The New Crypto Niche: NFTs, Play-To-Earn, and Metaverse Tokens. Munich Personal RePEc Archive, MPRA Paper No. 111351.
38. www.whitepaper.axieinfinity.com/axs (Date Accessed: March 18, 2022).
39. www.investing.com (Date Accessed: February 18, 2022)