Metaverse is a VR platform with significant future potential. The future of the Internet includes a virtual world in which people can interact without physical space constraints. Analysts estimate that these virtual environments could be the next ample investment opportunity. The Metaverse is still evolving, but the technology has the potential to revolutionize everything from e-commerce to social media and even real estate. As the audience for these virtual environments grows, so does the interest of businesses to capitalize on this trend. Facebook, for example, plans to change its name to "Meta" (FB) and invest billions of dollars in its ambitions to create a Metaverse. This article aims to help you better understand what a Metaverse is and how you can benefit from this technology.
Is Investing In The Metaverse A Good Idea?
It is essential to note that virtual worlds are not new. Companies like virtual world XANA, Decentraland, The Sandbox, and Roblox (RBLX) have been operating the VR space for years. Together, these companies attract millions of users. However, large tech companies looking to unite these disparate communities into a single metaverse are at significant risk. And for that, they also hope to risk part of their billions of dollars. For example, investment firm Grayscale estimates that global revenues from virtual games will exceed $400 billion by 2025, up 122% from $180 billion today.
And many large companies are starting to get involved. Sotheby's Art Gallery (BID) announced that NFT sales reached $100 million last year. Additionally, launched a new virtual gallery, Sotheby's Metaverse, in Decentraland for visitors to see available digital art. Likewise, Nike announced in December 2021 that it would expand its digital footprint by acquiring virtual sneaker company RTFKT. Other fashion brands such as Gucci, Givenchy, Dolce & Adidas and Gabbana have hosted virtual fashion shows on Metaverse.
The Metaverse economy also opens up new real estate investment opportunities. Some investors are interested in paying millions of dollars for "real estate" on Metaverse platforms like Virtual world XANA to live close to celebrities like rapper Snoop Dogg. Similarly, pop artists like Ariana Grande and Lil Nas X have hosted virtual concerts on the Metaverse, attracting millions of fans worldwide.
How Can I Invest In Metaverse?
For many individual investors, it is likely that they already have some understanding of the Metaverse. Many of the largest publicly traded US companies are either already involved in the technology or are actively seeking investment. Microsoft (MSFT) recently announced plans to acquire Activision Blizzard, expected to be the most prominent gaming deal in history, for $68.7 billion. It also placed a big bet on its metaverse expansion. "Games are the most immersive and dynamic entertainment category on any platform today and will play a vital role in the evolution of the Metaverse.
Other public companies, such as computer graphics semiconductor company NVIDIA, could benefit from the growth of VR platforms. Similarly, Autodesk (ADSK) and Unity Software (U) are manufacturers of software that enable architects and designers to create 3D models. Additionally, Fastly (FSLY), a cloud technology provider, is a leader in this space. The Roundhill Ball Metaverse ETF (META) offers an efficient and easy way to invest in specific Metaverse stocks for those looking for broader coverage. The fund has approximately $900 million in assets under management and an expense ratio of 0.75%.
Bottom Line
Of course, many investors have access to cryptocurrencies, NFTs and other digital assets as part of the meta ecosystem. However, many of these investments involve more risk and additional volatility than traditional investments. Therefore, it is always essential to consider your risk tolerance, do your research, and be willing to put up with what you are willing to lose. For most people, it's wise to have a diversified portfolio that contains the best investments.
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