In a recent report, Grayscale noted that its Consumer and Culture Crypto Sector saw significant growth alongside major cryptocurrencies like Bitcoin. Crypto applications covered in the sector include entertainment, music, media, collectibles, sports, and art.
Grayscale reported a 24% month-to-date growth in the sector as of November 27, 2023. The upward surge coincides with increased investors’ confidence in the crypto market, primarily driven by speculation that the U.S. Securities and Exchange Commission will approve one or more of the spot Bitcoin ETF applications it has been sitting on.
November Month-to-Date Returns for the FTSE Grayscale Crypto Sector Indexes | Source: Grayscale
Based on the recent performance, Grayscale predicted that the sector, which accounts for 2% of the crypto market cap, has “substantial opportunity.” The report based this projection on a number of factors.
“For one, we believe significant investments into metaverse projects from centralized tech companies (e.g. Meta Reality Labs and Apple Vision Pro) may prove to be tailwinds for this sector,” Grayscale stated.
Furthermore, the firm said the sector, which is still in its early stages, could see a considerable boost from highly funded crypto gaming projects such as Otherside and Futureverse. It added that most of these projects have yet to release their games.
In addition, the report said major players in the sector are well-positioned to capture mainstream users. According to the report, this will happen as NFT platforms try to digitize the $372 billion collectibles market. Furthermore, it said the inflow of gaming and metaverse decentralized applications into the $227 billion video game market will also drive this growth.
It bears mentioning that governance tokens, such as APE, are also covered under Grayscale’s Consumer and Culture sector. According to the report, most of the tokens under this heading are those that empower users to vote on decisions affecting protocols or applications.
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