What Is The Metaverse, And Should You Invest In It?
Last October, Mark Zuckerberg announced that the parent company of Facebook will change its name to Meta. Along with this announcement, Mark Zuckerberg also announced that from now on, Meta’s number one priority is to grow the metaverse, which he believes will be the future of the internet.
““I think we’re basically moving from being Facebook first as a company to being metaverse first,” said Mark Zuckerberg in an interview with The Verge.
But with all the crazy news coming out about the metaverse such as fashion companies pushing for digital clothes, or that you can buy virtual properties and real estate, it kind of begs the question, what exactly is the metaverse?
What is the metaverse?
Unfortunately, there is no one easy way to answer this question, as the metaverse is a very vague and complex term. As defined by Eric Ravenscraft of WIRED, the metaverse is not a piece of new technology, “but rather a broad shift in how we interact with technology.”
The easiest way to picture the metaverse is to imagine it as a virtual world that can be accessed using various technologies, such as virtual reality, augmented reality, video game consoles, computers, and even smartphones.
In its most idealistic form, the metaverse is a social media platform that can be lived in and connects people from around the world. Will this come to pass? No one knows yet.
But the most important thing to know with the metaverse, is that due to the fact that it is a virtual world, this calls for the need of a virtual economy. A working economy, where you can buy and sell products, and maybe even offer services.
Which also means an economy that you can invest in.
Should you invest in the metaverse?
So now we know that the metaverse, in theory, is a multi platform virtual world with a working economy, this opens up a very important opportunity; to invest and grow your investments in this virtual world.
In investing circles, investing in the metaverse is now the in thing, the buzzworthy investment that everyone is talking about.
But investing in a concept with no solid applications yet might sound a little bit scary, which explains people’s apprehension about investing in the metaverse.
However, according to experts, you definitely should invest in the metaverse. Here’s why;
Big companies are jumping headfirst in the metaverse scene
If you’re worried about what you’re investing in as you’re afraid of losing money; there will be two pieces of advice that you should follow. The first; don’t invest what you can’t afford to lose. The second advice; look at what big companies are investing in.
At the moment, it’s quite clear that big companies are preparing for a potential jump into the metaverse. For example, Nike recently purchased RTFKT Studios, a company that makes virtual sneakers.
Another big company that recently announced their interest in the metaverse is the company with the ubiquitous mouse, Disney. While no concrete plans have been announced, the company has said that a jump into the metaverse is in line with the company’s identity, as they pride themselves as always being on the forefront of technology.
Investing in virtual reality is not that new of a concept
As mentioned before, a lot of the apprehension held towards investing in the metaverse is due to the fact that most people still cannot wrap their heads around the idea of virtual goods.
However, the concept of investing in virtual worlds is not really something new. In 2006, schoolteacher Ailin Graef made her fortune by getting into Second Life, a virtual world massively multiplayer online game, early and amassing a portfolio of real estate properties in Second Life.
Now, the virtual plots of real estate she bought for $US9.95 is worth $US1 million in real money.
If you’re looking for a more recent example, look no further than Andrew Kiguel, CEO of crypto-asset investment firm Tokens.com, who recently claimed that his metaverse portfolio is now worth 10 times more than his purchase price.
“It’s all about the location,” he told USA Today, while describing how his latest acquisition, a piece of land right in the heart of a virtual downtown is key. “The more visitors who come, the more valuable the land, and the more a retailer and advertisers will be willing to spend to reach those people.”
As the concept of the metaverse gets more and more popular with time, there will be more and more virtual real estate moguls snapping up prime locations.
How do you invest in the metaverse?
According to Shixing Mao, aka “Discus Fish”, the CEO and Co-founder of Cobo, a formerly Beijing-based crypto currency asset manager and custodian platform, the best way to invest in the metaverse is by purchasing NFTs (non-fungible tokens).
You can do this by using your crypto wallet to purchase in-game NFTs. One such NFTs you can get your hands on is the Decentraland’s metaverse real estate, which they sell as NFTs.
Decentraland is one of the pioneers in establishing virtual plots of lands as NFTs, so right now it is the prime place you can browse through and explore your investing options when it comes to virtual plots of land.
Another way you can invest in the metaverse is by purchasing stocks of companies related to the metaverse. As the metaverse continues to grow, companies that are heavily involved in the development of the metaverse or companies that produce technologies needed for the metaverse to function will grow with it.
How do you know which companies are related to the metaverse? According to Dmitry Budorin, an advisor for ArtWallet, an NFT marketplace and storage solution, any company that works in AR/VR is related to the metaverse.
“Any company building VR/AR technology like Magic Leap, HTC Vive, Varjo, is a Metaverse company,” said Dmitry to Forbes.
Stocks of companies that are actively involved in the development of the metaverse is also a very good option, such as Facebook, NVIDIA, Roblox, and Unity.
One other option you can explore is investing in a metaverse index. This works just like how it does in real life investing in a stock index, in this case by capturing the trends in entertainment, business, and gaming that are moving to the virtual universe.
Investing in a metaverse index poses lesser risk to the investor compared to investing in metaverse tokens, due to the extreme price movements commonly associated with metaverse tokens.
For now, the metaverse is still very much a concept that is far removed from the final execution, with massive room to grow and to evolve.
For more information on NFTs, why not read our article that covers everything you need to know about NFTs here.