While the phrase “metaverse” may be unfamiliar to many, it has been in use for more than three decades. However, it has recently gained appeal as new initiatives begin to surface.
Readers of prominent works such as Neal Stephenson’s Snow Crash or films such as Ready Player One or The Matrix are well aware that the metaverse is not a new notion.
For decades, it has been a recurring theme in science fiction. However, the metaverse will no longer be referred to solely in science fiction films and books. The metaverse is on its way to becoming a reality.
But, exactly, what is the metaverse? What is it now, and what will it look like in a few years? How may potential investors get started investing in the metaverse?
This tutorial will explain what the metaverse is and how you can obtain investment exposure to it.
Diving into the Metaverse
The metaverse is thought to be the next phase of the Internet, with virtual reality (VR), augmented reality (AR), and extended reality (XR) mixing with the actual world.
In simpler terms, the metaverse can be thought of as a collection of interconnected virtual worlds, similar to how the internet is a nexus of linked websites.
The phrase metaverse is derived from the prefix ‘meta,’ which means beyond, and ‘verse,’ as in ‘universe.’
This Internet-native world may disrupt the world as we know it by providing an alternate digital reality in which humans will be able to “live,” “work,” and “play.” It is intended to be the successor to mobile Internet in the same way as Web 3.0 is expected to be the successor to Web 2.0.
Today’s games, such as Fortnite, Roblox, and Second Life, have the most 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: Interoperability, presence, and standardization.
Humans will be able to interact with others electronically and move between virtual environments utilizing avatars and other digital objects. People will likely utilize cryptocurrencies such as bitcoin (BTC) and ethereum (ETH) to make payments instead of fiat currency.
The metaverse is projected to alter virtually every industry and give birth to innumerable new business opportunities in its wake. As a result, it may become an interesting region to invest in.
How to invest in the Metaverse
If you are an avid investor, you know that it is never too late to start investing. While most of what the metaverse is yet unknown, there are currently ways for people to indirectly invest in the metaverse’s future success.
Bloomberg Intelligence recently projected that the metaverse market will be worth USD 800 billion by 2024, implying that this might be a profitable area to invest in.
So let’s get started and look at four different ways you might include the metaverse into your investment portfolio.
Buying “metaverse stocks” is one method investors interested in the metaverse can invest in it. Metaverse stocks are publicly traded shares of enterprises participating in the creation of the metaverse.
Because it is at the vanguard of constructing the metaverse, Facebook (FB) is a fantastic example of a firm whose stock you can buy if you want to invest in it. Facebook CEO Mark Zuckerberg has even stated that he does not want the company to be known as a social media company. He prefers to be known as a metaverse company.
The social media behemoth already has an Oculus VR headset and just introduced its first smart glasses in collaboration with Ray-Ban to expand its augmented reality capabilities (AR). If you don’t want to invest in Facebook, there are other firms that plan to play a part in the creation of the metaverse, including Microsoft, Unity Software, Roblox, Amazon, Walt Disney, and Nvidia.
Metaverse exchange-traded funds (ETFs)
Investors could also obtain exposure to the expanding metaverse industry by purchasing a metaverse ETF. An exchange-traded fund (ETF) is a collection of securities that trade on a stock exchange in the same way that stock does.
By investing in a metaverse stock ETF, people can invest in companies that are already making the metaverse happen or are in a good position to do so in the future.
For example, the Roundhill Ball Metaverse ETF (META) was designed to allow anyone to invest in and gain the benefits of the metaverse. Roundhill Investment’s ETF exposes investors to companies including Nvidia, Microsoft, Roblox, Tencent, Unity, and Amazon, among others.
Virtual world tokens
Virtual world coins are digital tokens that are associated with the virtual reality sector. Users in the virtual world can use virtual world tokens to purchase land and in-game goods such as avatars.
The Metaverse Index (MVI) token, which provides holders with exposure to a variety of tokens from crypto projects encompassing topics like non-fungible tokens (NFTs), virtual worlds, and online gaming, is an example of a virtual world token. In some ways, the Metaverse Index token functions similarly to a metaverse ETF for the crypto markets.
Tokens from Decentraland are another example. Decentraland is a virtual reality platform that allows users to acquire land, connect with one another, and play games. It is the largest virtual world in the NFT market, and its virtual land is represented on the Ethereum blockchain by the non-fungible token LAND.
MANA and LAND are the two tokens used by Decentraland. MANA is the network’s native utility token that is used for transactions, whereas LAND is a non-fungible token that symbolizes all land parcels on the platform.
Blockchain-powered metaverses that will most likely use NFTs and crypto assets will play a significant part in the metaverse’s development and adoption. This is because a successful metaverse must let users shift their avatars and virtual assets from one environment to another effortlessly and instantly.
NFTs are digital assets that represent a variety of unique goods such as art, in-game items, and collectible items. Platforms like Decentraland and The Sandbox have already enabled consumers to buy virtual plots of land and even design their own landscapes using NFTs.
As we get closer to the reality of the metaverse, we should expect to see more investment opportunities emerge in this arena.