- Cryptocurrencies are the future albeit with a long transition period.
- Zilliqa (ZIL-USD) is one token hinging on the success of the metaverse.
- Meta Platforms (NASDAQ:FB), with its 3 billion users, is paving the road for it.
The idea is old but now it’s almost real. The largest social media company — Meta Platforms (NASDAQ:FB) — announced its commitment to building its platform. Zilliqa is betting on the same future one electronic brick at a time. ZIL is the token helping support those efforts, so its future is exciting and risky. This means investments in ZIL now are speculative, and failure is definitely an option. But as they say, if there is no risk, then there will be no reward.
Within the cryptocurrency opportunity lies a slew of other crypto coins in which to invest. Zilliqa’s angle is a new spin on the older ones. I would rank it among the functional coins like Ethereum (ETH-USD) and Solana (SOL-USD). The renderings of their new world look great. They are simple tours much like virtually touring brick and mortar real-estate. If the debates over electronic currencies are hot, the ones over virtual life will be scorching hot. After all, it’s one thing to criticize assets, and another to challenge the way of life.
Zilliqa Is Blazing Trails
Companies like Zilliqa are bringing a new set of concepts for us to embrace. At least they are not going at it alone, with Facebook in the lead of this evolution. The goal is to move electronic social lives into the the Metaverse. This weekend I spent hours debating this with friends and family at a gathering. I found the same resistances that I got with my initial crypto conversation with the crowd. Some were even a bit hostile, but I think I laid the foundation for our next debate.
If Facebook builds it, we will come. They have 3 billion users, so currencies like Zilliqa have a tailwind pursuing the migration. Furthermore, investors are also correct in placing some risk on the metaverse. The idea is for demand on ZIL to grow as their Metapolis popularity grows. I like the play on words, but I have some concerns.
There have been delays and several milestones, but so far they’re not deal killers. If Zilliqa management delivers on its promises in the long run, the profits from ZIL-USD can be substantial. Its virtual world looks fantastic, so it merely needs to open for business. The concept is easier for younger people to grasp, especially gamers. After all, they already spend hours playing in various fantasy lands, so they will get it almost instantaneously. This makes the success of the metaverse somewhat of a self-fulfilling prophecy.
The Metaverse Is Coming
Source: Charts by TradingView
Picking Zilliqa as one of the winners is the risk we should be taking today. As a concept, I give the success of the metaverse investments high conviction. The degree of certainty drops by specifying that ZIL is also has a slam dunk scenario. So far it looks good, but I must temper my enthusiasm. It is definitely worth a nibble. But since I am still learning about it, I intend to take things slow. I would increase risk size with knowledge. Until then, I classify my moves on ZIL as speculative.
When embarking on a new speculative invest idea, it is important to keep the risk risk manageable. The fewer the questions I have about it, the braver I become with size. This is all the more important when the stock moves as fast as Zilliqa. Last week it fell 50% this month, thereby proving my cautious tone.
Judging by the ZIL chart, I expect support below 9 cents. Investors could wait for a perfect entry below 6 cents, or they can nibble long here. Since I deployed only a small stake, I can add more without too much worry. Don’t confuse this method with averaging down, which I dislike very much. This is averaging in to a full-size position rather than jumping in all at once. Had I already deployed my entire allotment, I would not consider adding to it at all.
I came into the strategy planning on only buying one bit at a time. This allows me the opportunity to eventually have a position of size at a reasonable entry overall entry price. The enticing thing about this opportunity is its similarity to old real-estate deals. Buy and hold until it explodes in value. If the metaverse in general comes to life, then Zilliqa and other intrepid companies like it will reap the reward. It may take years, therefore, investors must have patience.
On the date of publication, Nicolas Chahine held USDC, SOL and ETH. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Nicolas Chahine is the managing director of SellSpreads.com.