Should I invest in the Metaverse?

 

The Metaverse is one of the most popular investment opportunities today. Many investors have put the Metaverse in the spotlight, saying that it has enormous growth potential and is an excellent long-term investment opportunity. They are saying that the Metaverse is currently still in its “development phase” and will soon become a megatrend. Furthermore, according to some predictions, this market can be worth around 800 billion dollars, which is much more than the 2020 worth of “only” 22 billion dollars.

Participating companies

Many famous companies didn’t want to miss this fantastic opportunity and are already trying to take their place in the Metaverse. Below we will provide you with a list of different aspects of the Metaverse ecosystem and the companies that are participating.

• Virtual reality & Augmented reality (HTC, Unity, and Snap Inc.)
• NFTs & Digital Property (OpenSea, Sandbox and Upland)
• Video games & Virtual spaces (Fortnite, Rec Room, and Roblox)
• Cryptocurrencies & Payments (PayPal, Alipay, and Coinbase)
• E-commerce (Alibaba, eBay, and Amazon)
• Computing and Communication (Nvidia, Microsoft, and Apple)
• Social media (Telegram, Facebook, and TikTok)
• Streaming (Netflix, Fox, and Disney)
• Publishers & Developers (Nintendo, Tencent, and Epic Games)

 

Among the companies that have made their biggest bet on the metaverse are: Facebook, which recently migrated its name to Meta, in reference to the virtual world it plans to develop and which it defines as the next level of the internet. We can also find Amazon, one of the most important e-commerce platforms.

As we can see from the list above, Facebook, one of the leading social media platforms, is one of the companies that are “betting” on the Metaverse. In fact, Facebook even changed its name to Meta, and the main reason for that is to comply with the virtual reality that Mark Zukerberg plans to create.

The biggest e-commerce platform in the world, Amazon, is also a big supporter of the Metaverse. Amazon even launched a 3D online game where the users will be able to travel around the virtual city and even solve real tech issues by using the cloud. In other words, this game will serve as a tool (both educational and sales) to teach the users how to use cloud technologies and services.

Next on the list is Microsoft, which recently came up with a presentation that explains how people can use the combination of mixed reality and holographic technology. By doing so, its users can have holographic experiences using the tool Microsoft Teams.

On the other side, Disney plans to create a virtual universe of theme parks. The visitors of these virtual parks will be able to ride and visit them even without having to wear any AR headset. Disney even successfully patented this “virtual world simulator”. This technology is going to project 3D virtual effects and images onto physical spaces. The best thing about this technology is that it will personalize the projections for each individual by tracking them in the virtual world. For example, suppose that two families are entering this Disney Metaverse. One of them will be able to greet Donald Duck, while the other can interact with Elsa at the same time!

Let’s not forget about Roblox, which was one of the first games in which the players were able to explore something that is similar to the Metaverse. This game got so much attention that even Nike found its way in. Of course, we are speaking of the part of the Roblox game called Nikeland, where Nike fans are able to do many sports activities with their avatars.

This February, Microsoft acquired Activision Blizzard, the company that created the game World of Warcraft, for $68.7 billion. This move is connected with the company’s interests in the Metaverse because it plans to bring Call of Duty, World of Warcraft, Halo, and Minecraft there. Then, millions of gamers can start playing these fascinating immersive games.

Nvidia, one of the two main manufacturers of graphic cards, is working on “full steam” in order to meet Metaverse’s hardware needs. This tech giant is not only manufacturing GPUs, but instead, it is using its capabilities for its own 3D design platform. By doing so, Nvidia’s yearly revenue can easily “go north” for a few billion dollars.

 

How to invest in the Metaverse?

The Metaverse seems like a complicated virtual reality world, which is why you will have to do proper research about the risks and benefits of investing in the Metaverse. There are a few ways how can you invest in it:

• Purchasing Land in any Metaverse
  One way to invest in the Metaverse is by participating in Land Sales in the existing and new Metaverse projects. For example, you can buy virtual parcels in The Sandbox, Decentraland, or Illuvium. The best time for purchasing virtual land is at the very start of the sale. Many people are trying to invest huge amounts of money in such projects, and once all the virtual parcels are sold out, their price can be significantly higher than the price at the sale.
• Buying crypto tokens of Metaverse’s projects such as Decentraland and Metaverse
  However, even if you believe in these projects, you don’t have to buy their land in order to invest in them. Instead, you can buy their own tokens like SAND, MANA, ILV, etc. This can be a much simpler way to invest because if you already have an account at any crypto exchanges supporting these tokens, you can buy them in a minute!
• Purchasing stocks from Metaverse companies
  If you want to buy real stocks from these companies, your best bet will be to buy them through a brokerage. However, if you are new to stocks, we advise you to consult with a financial advisor first. Just please, for your own good, do proper research before jumping to any big conclusions. Once you decide which stocks you are going to buy, create a brokerage account if you don’t already have one, and execute the trade. Of course, before being able to buy stocks, you will have to fund your account!
• Investing in Metaverse NFT collections
  Many of the Metaverse projects have their own NFT collections. NFTs are very attractive to many investors because they are both assets and tokens. Not only will you own a unique Non-Fungible Token, but the NFT itself will provide you with additional benefits for that project/game.
• Create your own company in the Metaverse, or another brand new Metaverse
  Last but not least is the possibility of building your own Metaverse or starting a business in some of the existing Metaverses. However, you should know that these investments require much planning, a big team, capital, market research, and of course, time! So, if you think you have everything you need, just go ahead and give that idea of yours a shot. After all, who knows what can happen a few years from now?

Metaverse Stocks – Pros & Cons

Like every other stock, Metaverse stocks can be pretty promising, especially if we have in mind the whole Metaverse craze that is happening all across the world. New companies are pouring money into this market every month, while others are starting to deal with FOMO (Fear of missing out). On the contrary, there are some downsides when it comes to Metaverse stocks. We are speaking of all the risks and time needed for conducting research. These are the pros and cons of investing in Metaverse stocks.

Pros

The hype is real: Thousands of investors and crypto enthusiasts think the Metaverse will become a part of our daily lives in the next few years. Yeah, every stock investment comes with a certain risk because you can never correctly predict how the stocks are going to behave in the upcoming months or years. For example, Bloomberg analysts estimate that the Metaverse industry will be worth around $800 billion by the year 2024. This is much more than they estimated in 2020 when they expected this industry to grow to around $480 billion.

 

It is affordable: You don’t have to pour huge amounts of money in order to invest in Metaverse stocks. Instead, you can buy some fractional shares of any of the major Metaverse companies.

Big names are already in: As mentioned, many big companies have already dipped their fingers in the Metaverse honeypot. For example, Microsoft and Amazon are some of the biggest companies in the world, and they have previously successfully completed projects. So, if they are making bets on the Metaverse, it may be smart to buy some Metaverse stocks for yourself.

Cons

Potential to lose money: Whenever you invest in anything, there is always a loss potential. Buying stocks can be risky, but buying Metaverse stocks can be even riskier. We are saying this because the crypto market is a very volatile one, and the Metaverse is still in its development phase. However, you have probably heard Thomas Jefferson’s quote: “With great risk comes great reward”.

Time-consuming: As per the rule of thumb, you should always spend some time doing research before you buy any stocks. Doing research for Metaverse stocks can even be trickier, and it needs an advanced understanding of the whole market and technologies. That is why you should disperse the risks by buying stocks from several companies like Microsoft, Autodesk, Nvidia, Roblox, etc. Another way of dispersing risk is to buy shares from companies whose holdings are stocks from other popular Metaverse companies. Such an example is the Roundhill Ball Metaverse ETF (METV).

Lack of Metaverse laws: The Metaverse is based on cryptocurrencies and blockchain technology. We can do many things in the Metaverse, including trading cryptocurrencies, buying virtual land, engaging with other users, etc. However, this whole freedom comes with some downsides. For example, there are still no laws about what is legal and what is illegal there, and these laws will surely have some impact on the future of the Metaverse.