What To Think, How And When To Care

Trying to imagine the Internet with any privacy or subtlety during its development in the 1980s could have been a frustrating and confusing task. The mechanics of what it is – a vast network capable of transmitting data and media across interconnected devices – is far less important than what you did; It gave us another way to exchange and interact.

– Faluk

Q4 2021 Hedge Fund Speeches, Conferences & More

As the term “metaverse” continues to spread talks, headlines, and interviews, there is a similar challenge in understanding what everyone means by the term. In mechanical terms, the metaverse can be understood as a digital world powered by virtual reality, augmented reality, and virtual worlds that provide users with a different level of user immersion. But the most useful understanding will focus on the fact that the metaverse is, above all, a shift in the way we can interact with technology.

Early byproducts of metaverse evolution include alternate, hyperrealistic worlds where people coexist. The first applications were in the gaming world, but increasingly, augmented virtual reality, 3D holograms, and photorealistic avatars are expanding people’s paths to coexist and interact in these online universes – a shift that hasn’t gone unnoticed. Companies with big names and industry insights.

Today, the metaverse has become even more important as a place of economic activity – a digital economy where users can create and exchange. According to experts at ARK Invest, revenue from virtual worlds could approach $400 billion in the next three years. That’s why, along with the headlines mentioned recently, the metaverse deserves an in-depth understanding. Forward-thinking investors need a way to think and plan for its importance as a new investment space. Here are some ideas on what to think about the murky ocean world, and how to consider it within a long-term investment perspective.

What’s new in Metaverse

Another worthy question might be “Who is the new metaverse?” Gen Z grew up familiar with metaverse due to its experience with virtual games that have in-game currency, 3D avatars, and expanded and changing virtual worlds. Building on previous models of “internet gaming,” Gen Z embraced the monetization that came with those virtual games, finding new ways to make these platforms a creative and economical space. A study recently showed that blockchain-based games experience a 5-fold increase in user spending compared to traditional online games.

Other modes of expression and exchange emerged from these gaming spaces, including fashion and art. What began as the ability to swap clothes for an avatar quickly led to a Gucci digital bag selling in the online Roblox space for a very real $4,000—well above what it’s worth in real life. Digital art exchanges such as OpenSea, an NFT marketplace, have crossed thresholds in trading volumes since the beginning of last year. In November, exchanges on OpenSea crossed $10 billion.

What has been notable in recent months is the slight increase in institutional activity within the metaverse. When Facebook announced its rebranding under the name “Meta”, they simultaneously announced their plan to spend at least $10 billion in the space. And Facebook, now Meta Platforms Inc (NASDAQ:FB), wasn’t the only big-name brand planning to venture into space.

Household names enter the space

A useful piece of Meagan Loyst on the decentralized publishing platform Mirror illustrates some of the notable transactions and brand collaborations that have recently powered the Metaverse. Adidas, as per its details, launched a metaverse campaign in December consisting of 30,000 NFTs that generated $23.5 million in sales. during the afternoon. Fashion giants and music artists are also turning to the space as a place to organize campaigns and present new releases.

Selected collaborators from Adidas, Nike, and other brands have always been in the trend of popular culture. The choice to pursue the metaverse, and their apparent success within this space, prove that change is underway. It is a change that has important opportunities and consequences for investors as an up-and-coming industrial sector.

For Investors: How To Catch The Wave Metaverse

Despite the success of those aforementioned campaigns, companies are still trading as they place their bets on the development and placement of the metaverse space. Facebook, now Meta, appears to be focusing on infrastructure for virtual homes. Microsoft is preparing for the world of virtual meeting rooms, and a lot of new vendors in the market are focusing on technical building blocks, such as interface innovations and motion-tracking tools, that can expand the user experience.

For investors, yield is return, and there is reason to believe that more return comes from the metaverse. Roblox, a platform with user-generated games, is worth $45 billion after its IPO. Digital real estate investments work similarly to real-world principles, and stocks are stocks, even in the metaverse.

However, most investors think of metaverse investments as speculative, riskier and more experimental parts of their portfolios. The least volatile option for investing that focuses on the metaverse is investing in publicly traded companies that are making waves in the field. Microsoft, Boeing, and Roblox will all qualify in this area.

For investors who want to take it one step further, there are endless options and market platforms from which to purchase digital land and NFT holdings. In the case of real estate, users link their cryptocurrency wallet to the market. They will then explore and invest according to their natural principles in real life, taking into account the price, location and future estimate of the digital “place.”

Rapidly, the experience of investing in digital real estate is increasing. The Republic Realm, a frontier real estate company, Metaverse, launched a professionally managed, diversified digital real estate investment fund in April of last year. With some of the largest portfolios in Sandbox, Axie, Infinity, Decentraland and Treeverse, the company provides a path for established and new investors to apply the same principles to the metaverse and NFT ecosystem. Today, the company owns more than 1,900 NFTs across more than 17 popular metaverse platforms.

Cryptocurrencies are closely related to metaverses, and some tokens actually take different amounts of the metaverse’s market cap. Investing in tokens is certainly riskier than an alternative focus, and investors should remain true to the age-old principle of not risking more than they feel they can afford to lose. But tokens are an interesting focus because of their new use cases. Many metaverse cryptocurrencies double as a voting process, allowing their holders to participate in decisions within the metaverse platforms and digital communities. With the rise of digital assets, the value of the tokens attached to them increases, making investments focused on tokens volatile and exciting.

Predicting outcomes is challenging regardless of the investment vehicle, but it is made even more difficult by the new and evolving nature of the metaverse. Much of the movement in the space can be seen by the actions of publicly traded companies, and investors who want to get a piece of the action might be advised to focus on these market players. Investment strategy and best practices are sure to change drastically with the pace of change within the space. If nothing else, investors might try their hand at tokens – or attend a virtual concert on Fortnite – just to say they were part of these early beginnings, which undoubtedly foretell a big and lasting change.


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