While the term metaverse might sound new to many people, it’s actually been around for more than three decades. However, it has recently received an increase in popularity as new projects start to emerge.
Avid readers of popular books like Snow Crash by Neal Stephenson or films like Ready Player One or The Matrix, know that the metaverse isn’t a new concept. It has been a theme in science fiction for decades. But soon, the metaverse won’t be referenced purely in science fiction movies and books. The metaverse is coming and aims to become real.
But, what exactly is the metaverse? What is it now and how will it look in a couple of years? How can interested investors start investing in the metaverse?
In this guide, we discuss what the metaverse is, and you can gain investment exposure to it.
Diving into the Metaverse
The metaverse is assumed to be the next phase of the Internet that will see the merging of virtual reality (VR), augmented reality (AR), and extended reality (XR) with the real world.
In simpler terms, the metaverse can be viewed as a collection of virtual worlds that are interrelated, just like how the world wide web is a nexus of connected websites.
The term metaverse is a combination of the prefix ‘meta,’ which means beyond, and ‘verse,’ such as in the ‘universe’.
This Internet-native world might change the world from what it is today by providing an alternative digital reality where humans will be able to “live,” work, and play. It is expected to be the successor of the mobile Internet, similar to how Web 3.0 is expected to become the successor of Web 2.0.
Today, games like Fortnite, Roblox, and Second Life provide the closest resemblance to the metaverse.
When it finally launches, the metaverse will be much more than what it is today. The metaverse – once fully developed – will have three main aspects:
- and standardization.
Humans will be present virtually with others and have the ability to move between virtual spaces using avatars and other digital items. And instead of fiat currencies, people will likely use cryptocurrencies – such as bitcoin (BTC) and ethereum (ETH) – to make payments.
The metaverse is expected in its wake to transform practically every industry and give birth to countless new business opportunities. As a result, it could also become an exciting area to invest in.
How to invest in the Metaverse
If you are an avid investor, then you know that it’s never too late to be early. While much of what the metaverse is might still be vague, there are already opportunities for people to indirectly invest in the potential success of the metaverse.
Bloomberg Intelligence recently estimated that the metaverse’s market size will reach USD 800bn by 2024, suggesting this could be a lucrative area to invest in.
So let’s dive in and look at four possible ways you can add the metaverse into your investment portfolio.
One of the ways investors interested in the metaverse can invest in it is by buying “metaverse stocks.” Metaverse stocks are shares in publicly traded companies that are involved in the development of the metaverse.
Facebook (FB) is a good example of a company whose stock you can buy if you are looking to invest in the metaverse given that it’s at the forefront of building it. Mark Zuckerberg, Facebook’s CEO, has even said that he doesn’t want the company to be known as a social media company. Instead, he wants it to be known as a metaverse company.
The social media giant already has an Oculus VR headset and just recently launched its first smart glasses in partnership with Ray-Ban to build on its augmented reality (AR). However, if Facebook isn’t where you’d want to invest, there are other companies that plan to play a role in the growth of the metaverse, such as Microsoft, Unity Software, Roblox, Amazon, Walt Disney, and Nvidia.
Metaverse exchange-traded funds (ETFs)
Alternatively, investors could gain exposure to the growing metaverse industry by buying a metaverse ETF. An exchange-traded fund (ETF) is a basket of securities that trades on an exchange just like a stock.
A metaverse stock ETF lets people invest in the companies that are already making the metaverse happen or are in a good position to do so in the future by buying into the fund.
The Roundhill Ball Metaverse ETF (META), for example, was created to allow anyone to invest in and reap the benefits of the metaverse. Roundhill Investment’s ETF provides investors with exposure to companies such as Nvidia, Microsoft, Roblox, Tencent, Unity, and Amazon, among others.
Virtual world tokens
Virtual world tokens are digital tokens linked to the virtual reality industry. In the virtual world, users are able to use virtual world tokens to buy land and in-game collectibles like avatars.
An example of a virtual world token is the Metaverse Index (MVI) token, which provides holders with exposure to a range of tokens from crypto projects covering areas such as non-fungible tokens (NFTs), virtual worlds, and online gaming. In a sense, the Metaverse Index token acts like a metaverse ETF for the crypto markets.
Another example is Decentraland’s tokens. Decentraland is a decentralized virtual reality platform that allows users to buy land, interact with each other, and play games. It’s the largest virtual world in the NFT space, and its virtual land is represented on the Ethereum blockchain as a non-fungible token known as LAND.
Decentraland uses two tokens: MANA and LAND. MANA is the platform’s native utility token that is used for transactions, while LAND is a non-fungible token that represents all parcels of land on the platform.
Blockchain-powered metaverses that will likely utilize NFTs, and cryptoassets will play a huge role in the development and adoption of the metaverse. This is because a functioning metaverse will need to have the ability to allow users to seamlessly and instantaneously move their avatar and virtual assets from one world to another.
NFTs are digital assets that digitally represent a wide range of unique items such as art, in-game, and collectible items. Already, platforms such as Decentraland and The Sandbox have made it possible for people to purchase virtual parcels of land and even build their own environments using NFTs.
As we move closer to the metaverse becoming a reality, we can expect to see more investment opportunities arise in this space.
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