What Investors Should Consider When Stepping Into The Metaverse
The Metaverse is here and investors of all shapes and sizes are trying to get on the investing bandwagon. Some are playing millions of dollars for virtual land. One user recently paid $450,000 to be Snoop Dogg’s neighbour in a virtual world called the Sandbox. However, even more traditional, value investors, such as Warren Buffet, are starting to see the value of Metaverse stocks. So what should every investor know before stepping into the Metaverse investing arena? What investors should consider when stepping into the Metaverse ? And is it a safe way of making money?
What Investors Should Consider When Stepping Into The Metaverse
What is the Metaverse?
The tech and business world, as well as smart city builders, are preparing for a Metaverse-based future. The Metaverse is the sum of all the processes and protocols empowering the digital transformation of our lives, the internet systems, and the emerging blockchain empowered with AI Web3.
It transforms our common experience as a society and opens the door to the new digital transformation. It will transform our present and the virtual world so as to our digital twins (avatars) are able to connect through virtual cities, work environments, buildings, travel, and entertainment. Today, however, the project is only at the beginning stages of its existence. There is a number of companies, including Meta (Facebook), that are trying to win the race of creating immersive virtual experiences.
What Investors Should Consider When Stepping Into The Metaverse
Top investment opportunities
Meta: After the announcement of Facebook’s rebranding to Meta, its stock has become the original Metaverse stock. As the CEO, Mark Zuckerberg said in a recent interview:
“And my hope, if we do this well, I think over the next five years or so, in this next chapter of our company, I think we will effectively transition from people seeing us as primarily being a social media company to being a metaverse company. And obviously, all of the work that we’re doing across the apps that people use today contribute directly to this vision in terms of building community and creators”.
Although the Facebook stock has already risen in price significantly over the past year, its growth potential in the new metaverse-based future is still large.
Unity: Unity is a smaller-scale company, but with a great vision, and a fast growth potential, which was recently reflected in its price. Unity is trying to become a one-stop shop for all things 3D content (VR and AR). By empowering creators with its tools, it is betting on capturing most of the market share.
Decentraland: Decentraland is a 3D virtual world browser-based platform, allowing users to buy virtual plots of land through their MANA tokens. It was opened to the public in February 2020 and is overseen by the nonprofit Decentraland Foundation. Even JPMorgan, the big US investment bank, recently entered the Metaverse by buying a virtual lounge in Decentraland.
“When you think about the economics of the metaverse — or metanomics — there are opportunities in almost every market area.” the bank wrote. “We are not here to suggest the metaverse, as we know it today, will take over all human interactions, but rather, to explore the many exciting opportunities it presents for consumers and brands alike.”
Amazon: Regardless of the shape of the future metaverse universe, it will need unprecedented computing power. This means the Jeff Bezos-founded Amazon is a safe bet to invest in. Like all Big Tech stocks, it has risen over the past year but has clear growth potential.
Real estate:
Real estate in the metaverse is still quite a niche market. As Janine Yorio, the CEO of a virtual land platform Republic Realm tells CNBC:
“Buying virtual land is pretty simple — either directly from the platform or through a developer. Investors build on their land and make it interactive.” but:
″[It’s] highly, highly risky. You should only invest capital that you’re prepared to lose. It’s highly speculative. It’s also blockchain-based. And as we all know, crypto is highly volatile. But it can also be massively rewarding.”
It is still very speculative at this stage but may prove rewarding. High risk, high reward. Only invest the amount that you are prepared to lose if things go sideways.
Conclusion
The Metaverse can be viewed as the next trend for tech, after the Internet. As with Internet companies having unprecedented growth in the past 20 years, the Metaverse offers similar opportunities. Hence, no real investors should disregard it. Invest safely, but with some creativity.
Read more: Making the Metaverse the key to a better future instead of a dystopian prison
Founder Dinis Guarda
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