Marcus de Maria, Founder and Chairman at Investment Mastery, explores…
The metaverse has emerged as the latest digital asset trend, and major corporations such as Apple, Microsoft and of course, Facebook, are eager to participate.
It is essentially a virtual 3-D world where people can play games, socialise and travel. Some refer to it as web 3.0, the next stage of the internet, and it allows users to create avatars that can interact with others online for a more immersive and interactive experience.
Games like Roblox, Fortnite, and Minecraft, where players create a digital version of themselves and socialise or create their own world, may have introduced parents of young children to the metaverse. There are also adult-oriented metaverses, such as Decentraland and The Sandbox, where users can buy and sell virtual land and goods for their avatars.
Although building digital structures and hosting digital events in a virtual world may appear to be child’s play, these activities are becoming very serious pursuits for many. As the metaverse grows, so will the opportunities for various types of businesses and brands.
This is where it gets interesting, as many large corporation brands can see how the metaverse is appealing and are initiating partnerships with the metaverses. For example, Adidas partnered with The Sandbox to create the AdiVERSE metaverse, which involved Adidas buying up a large amount of land within the game’s ecosystem. This means Adidas will be able to offer customers in the metaverse exclusive content and experiences, their campaign strapline #ImpossibleisNothing captures the possibilities within the metaverse, and Adidas, like so many other brands, recognises the unlimited potential. These digital assets (NFTs) will be secured through partnering with Coinbase, a leading crypto exchange.
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Ultimately, participating and investing in the metaverse enables people and brands exposure to new technologies like blockchain, augmented reality, cryptocurrencies, and NFTs – which are the technologies of the future.
To truly understand the monetary value in the metaverse, Gucci recently made headlines, after selling a virtual bag within the popular game Roblox for 350,000 Robux (Roblox digital currency) equating to over $4,000 dollars, which is more than the actual physical bag sold in their stores. As the Gucci bag is not an NFT, meaning it only has value in the Roblox universe, it can only be used within the game. This may seem bizarre to many people, but for would-be investors and large corporations this opens up huge opportunities.
The two main ways to invest in the metaverse are:
- Directly, by purchasing property and other assets inside the metaverse,
- Indirectly, by purchasing the stocks of businesses or Exchange Traded Funds (ETFs) that make investments in the metaverse.
Investing directly in the metaverse is a popular choice for seasoned investors, there are different ways to do this:
- Buy virtual land – choose a metaverse platform and build an account there, as mentioned before Decentraland and Sandbox are two of the most popular. Once you start purchasing land, you will receive NFTs as proof of purchase
- Cryptocurrencies – the currency within the metaverse for purchasing is crypto, including NFTs, popular currencies are Decentraland’s MANA, The Sandbox’s SAND, Star Atlas’ Atlas and Axie Infinity’s AXS.
- NFTs – These include music, artwork, digital collectibles, and other items with buyer ownership rights in the metaverse. Well-known companies like Gucci and Adidas sell assets based on NFTs that ensure uniqueness of ownership, as do auction giants like Sotheby’s.
There is no doubt that there is a lot of potential for investors within the metaverse, however, compared to conventional investments, many of these do carry higher risks and more volatility. Therefore, it’s crucial to think about your risk tolerance, do your research, and be at peace with any potential losses. For the majority of people, it makes sense to have a diversified portfolio that includes a variety of the best investments.