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Key Takeaways
You’ve heard the term “metaverse” thrown around casually, at work, and everywhere in between. Although this term is commonly used, you might not be entirely clear on what the metaverse is in its current state.
Let’s jump right in to explore what the metaverse really is right now and what it might mean for your investment portfolio.
Although coined in the early 1990s in a Neal Stephenson novel, the early phases of the metaverse are now a reality. When you hear about the metaverse, it’s often portrayed as the next frontier in the technology industry. The metaverse is a collection of digital platforms focused on virtual and augmented reality opportunities.
Of course, the focus of the metaverse is the virtual realm. But some people envision the metaverse including hardware, primarily headsets and smartphones.
The ultimate goal of this digital space seems to be the creation of an individualized experience for the user. In the future, you might be able to explore far flung destinations through a VR headset or connect with others in entirely new ways through the digital network of the metaverse. The foundation of this digital realm is the blockchain.
As of now, the metaverse is most widely accessible through integrations within other online attractions, like video games. A few of the most popular video games currently in the metaverse include:
Sandbox: Within Sandbox, you can create any number of things, including avatars, vehicles, tools, and more. When you create within Sandbox, you’ll have the option to sell your creations to other users. The main currency used within this platform is Sand, which can be used to purchase pieces of digital real estate.
Decentraland: Decentraland gives users the opportunity to create avatars, purchase wearables for your avatar, and buy a piece of digital real estate available for sale. It’s even possible to earn an income in this world by setting up a business on your slice of digital real estate, which is powered by the Ethereum blockchain.
Farmers World: Farmers World launched in 2021. You can purchase a piece of digital property to farm for an income. A few ways to earn within this world include mining gold, breeding livestock, and building homes. As your plot of land creates goods, you can trade with other users.
Axie Infinity: This corner of the metaverse was inspired by Pokemon. Within the game, virtual pets and items are available as NFTs.
At first glance, it’s easy to confuse regular video games with the metaverse. But in general, most agree that the metaverse must be tied to the blockchain in some way. With that distinction, it’s possible to differentiate between the two.
Although no one can predict the future, many are making big bets on the future of the metaverse.
For example, Mark Zuckerberg from Meta is pushing the company’s direction and investment deeper into the metaverse. In 2021 alone, Meta spent $10 billion dollars designing its own metaverse. That’s an immense amount of capital to invest in the future of the metaverse. The company envisions profits at the end of the tunnel in the form of a platform where creators buy and sell digital products.
As major companies, like Meta, move towards the metaverse, there are more opportunities to include exposure to the metaverse in your investment portfolio. One example includes Fidelity’s FMET ETF, which includes exposure to Alphabet, Apple, Nintendo, Meta, and more.
If you are looking at the metaverse as a digital real estate investment opportunity, you aren’t alone. Many investors consider the metaverse the next frontier in real estate investing.
If the idea of digital locations entirely online comes to fruition, digital real estate could provide an opportunity for creators to build an income stream by selling to others in the metaverse. For example, you could purchase a piece of digital real estate and sell tickets to virtual events or sell digital art for those within the metaverse to enjoy.
There are a lot of different opportunities to find your footing in the metaverse, and it’s possible that more and more platforms will appear, hoping to get you involved.
What’s unclear still is which platforms will become the most popular. And because of that, it can be challenging to determine what real estate in the metaverse will be worth a significant amount in the future.
Many are looking to platforms with market caps as those with the most potential upside. Decentraland and The Sandbox both have market caps in the billions that offer an encouraging opportunity for some investors. A cap on the number of parcels introduces an upper limit for the supply. So, if demand increases for this digital real estate, the price for a parcel will likely increase.
Before you jump into any digital real estate investments, it’s worth pointing out that these assets come with extreme risk. Although it’s possible for real estate in the metaverse to grow in value, a decline in value is also possible. With that, this opportunity is most enticing for those with a high risk tolerance. If you are unable or unwilling to meet the high risk demanded from this investment, then it’s likely not the right option for your investment portfolio.
The metaverse isn’t just a buzzword. It’s facilitating a new way for people to interact on the internet, manifesting now in gaming and social platforms. If you want to add exposure to this new type of asset into your investment portfolio, it can take some time to get up to speed on all the ins and outs of the industry.
Fashion and apparel brands, like Nike, have also launched right in on the Metaverse – Nikeland has drawn in users with more than just digitally remastered shopping experiences, tapping top talent like LeBron James for appearances. This is likely to be the next wave of the Metaverse, where lifestyle takes on entirely new meaning.
In place of investing in any and all of the companies listed here, investors can capture the momentum of the Metaverse while hedging across a variety of its top players. Q.ai offers artificial intelligence that scours the markets for the best investments and bundles them up in handy Investment Kits like its Emerging Tech Kit.
Download Q.ai today for access to AI-powered investment strategies. When you deposit $100, we’ll add an additional $100 to your account.
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