Ever since Mark Zuckerberg announced his new plans for Facebook, the idea of the metaverse has boomed in popularity. There is so much newfound excitement for all the investment opportunities in this space. But first, it is essential to understand what exactly it is.
What is Metaverse?
Metaverse is an immersive virtual reality experience where users can explore a computer-generated universe. By merging the real and virtual worlds together, the metaverse could transform numerous industries, Music artists can hold virtual concerts with holograms, VR games can disrupt the gaming industry, virtual travel allows visits to the most interesting places, interactive workspaces could become the new office, and VR walkthroughs may help you decode your next home purchase.
You interact with this universe with a VR headset from your own living room. If all of this sounds a little crazy to you, then think about this, if you told someone from 30 years ago that you would be spending your entire day in front of a computer talking to moving heads on the screen, they would’ve laughed in your face. Today, we are at the same junction with the metaverse. What seems like a crazy futuristic world just might become a regular daily activity five to ten years from now. We have no idea whether it will be successful or not, but it is good to know how you can get involved with it.
Here are the top 5 ways to invest in the metaverse-
These are the companies seeking to make the metaverse happen. Facebook/Meta owns Oculus and looking to expand into augmented and virtual reality.
Unity software is used to create games that can easily be adapted into the virtual world.
Nvidia makes GPUs which are a critical component of the metaverse. They are also working on the omniverse which ties different 3D worlds into a shared space.
Roblox already has a fully operational digital world where players can interact with user-generated games.
Autodesk has 3D Macs and Maya to develop virtual applications.
Microsoft recently introduced new virtual tools that enable users to collaborate in a VR setting. Their gaming division with Xbox and Minecraft also stands to benefit.
Given all the hype, Round Hill Investments started an ETF that tracks all of the companies taking part in the metaverse. The fund just launched in June and has about $900 million in assets under management. The expense ratio is a bit high at 0.75%. This may be a way for investors to get involved.
3)NFTs (Non-Fungible Tokens)–
These are digital certificates that represent ownership of a property in the metaverse. Just like we have clothes and accessories that represent our identities in the real world, we could have virtual versions of them too. Gucci, Adidas, Burberry, and Nike are already hopping on this train. NFT collectibles have already become an integral part of VR gaming. Many games already incorporate them into their gameplay, allowing other players to trade these assets with each other. Owning NFTs may also give you exclusive privileges. For eg- Celebrities are buying Bored Ape Yacht Club and Crypto punk NFTs for access to exclusive parties and closed-off affluent communities. In 2021, the NFT trading volume was $23 billion. If you want to check a few of them out, some of the most common marketplaces are the Open Sea for Ethereum-based NFTs and Solanart for Solana-based ones.
You can now buy virtual plots of land in the metaverse. The most popular ones are Decentraland and Sandbox. Republic Realm spent $4.3 million for a plot of land in Sandbox, and Tokens.com spent $2.4 million for a piece of land in Decentraland.
Someone even spent $450k to become Snoop Dogg’s virtual neighbor in the metaverse.
The idea is that people can build on this land and earn income from it. Think of charging people for parties, viewing art galleries, visiting stores, etc.
In the real world, we transact with fiat currency. In the virtual world, cryptocurrency takes its place. The currency used will depend on which metaverse platform you plan on exploring. In Decentraland, the currency is mana; in the sandbox, it’s sand, and AXS is the currency for the popular gaming platform Axie Infinity. In fact, this platform has become extremely popular in Ghana and the Philippines. Players are making more from this game than from a minimum-wage job.
So, Is the Metaverse’s Next Big Opportunity?
There is potential, but we are still early in this game. We want a high-definition VR world where we can seamlessly interact with others, easily buy from virtual stores, and take part in innovative experiences. We feel like the current metaverse projects are not there yet. However, investing in metaverse stocks can be a good option as compared to NFTs and virtual land.
Investing 10% of the portfolio in cryptocurrencies like Bitcoin and Ethereum can also be a good idea. Ethereum’s blockchain is the basis for many of the big metaverse projects. If the concept does pick up, then players will be paying Eth gas fees plus burning Eth, eventually causing its prices to rise.
You may have heard of the quote, “The secret to getting rich in a gold rush is by selling shovels.” In the case of the metaverse, Eth is the shovel.