Decentraland metaverse

Can Decentraland (MANA) Reach $100?

(Updated 19. September 2022)

Decentraland was my first encounter with “the metaverse”. In this article, I’m looking into the question “Can Decentraland reach $100?”

Here’s the short answer:

Yes, Decentraland can reach $100. This would put its market capitalization at $170 Billion, which is realistic because it is below Ethereum and other cryptocurrencies. According to Raoul Pal, Decentraland has enormous potential and might go way beyond $100.

The main obstacle and reason why Decentraland might struggle to reach 100 dollars is that it has a huge supply. Currently, there are 1.7 billion tokens in circulation, which logically makes the price low.

Remember: Price = Market Cap / Circulating Supply.

If the circulating supply is high, the price must be low. However, with a large enough market cap, Decentraland will reach $100.

“Just how big does the market cap have to be?”

We can calculate that by manipulating the equation above like this:

Price * Circulating Supply = Market cap

$100 * 1,700,000,000 = $170,000,000,000 = 170 Billion USD

In other words:

For Decentraland to reach $100, the market cap has to reach $170 Billion

(Recommended reading: Can The Sandbox Reach $1000?)

To give some perspective, the image below shows a hypothetical Decentraland at $100 side by side with the expected Bitcoin and Ethereum prices:
(Bitcoin will hit $100K and Ethereum will hit $8K)

Decentraland $100

If Decentraland at $100 had a market cap bigger than Bitcoin or Ethereum, I would deem it unrealistic.

However, as we can see in the image above, Decentraland at $100 does not even come close to any of them.

That is good news and tells me that a $100 Decentraland is highly realistic.

Let’s get into the what, and the how, and analyze it deeper:

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How Can Decentraland Reach $100?

The potential value of this coin is insanely high. We’re talking trillions of dollars in market capitalization.

If Decentraland manages to capture all its potential, the price would probably be in the thousands of dollars. But I’m getting ahead of myself…

Think about it:

Decentraland is recreating the world in a digital format. It creates value from real estate, art, music, games, gambling, collectibles, parties/festivals, in-game businesses, marketplaces, and the list goes on…

We’ve got respected macro experts like Raoul Pal saying that “the metaverse”, which Decentraland is creating, might double the global GDP.

His reasoning is basically like this:

If we copy the world into a digital format, we could potentially create the same amount of value in the metaverse as in the “real” world, and as a consequence, double the global GDP.

What exactly does “double the global GDP” mean for Decentraland?

Well, the current global GDP is estimated to be roughly 85 Trillion USD. To simplify this a lot, we can think of the global GDP as “the world’s market cap”.

If Decentraland gets a 100% market share, which it won’t, and its market cap reaches $85 Trillion, the price would reach:

$85 Trillion / 1 700 000 000 = $50 000

If Decentraland gets a 20% market share, which is highly unlikely, of the metaverse and reaches a market cap of 0.2 * $85 Trillion = $17 Trillion the price would be:

$17 Trillion / 1 700 000 000 = $10 000

Even if it only captures 1% of it, which is more likely, the price would be:

$0.85 Trillion / 1 700 000 000 = $500

With this in mind, I don’t think reaching $100 is any problem for Decentraland. However, we’re talking long-term in this thought experiment. Probably something like a decade or two, maybe even more.

Nevertheless, we see the beginnings of this value explosion already. There have been huge concerts, parties, art gallery openings, other social events, and much more. The real estate part and the advertising from businesses in Decentralands metaverse are also taking off as I write this.

You can read more about the future of Decentraland here.

Conclusion: Yes, Decentraland Can Reach $100

Decentraland can definitely reach $100 if it manages to capture a significant part of the value creation of the metaverse.

If Raoul Pal is right, and the metaverse actually manages to double the global GDP, Decentraland can blow through $100 like a hot knife through butter. It’s more likely to reach into the thousands.

Oh, and please remember this:

This article is NOT a price prediction type of article. All of this is purely hypothetical and should be considered a thought experiment. I hope you found it interesting and illuminating.

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