- The metaverse is a multi-billion dollar business and the volume of investments in it could reach billions by the end of the decade.
- There are several ways to invest in this future technology and each has different potentials.
- Multiple vehicles can be used to invest in the metaverse: funds, direct purchase of shares, cryptocurrencies, virtual parcels and non-fungible tokens.
Metaverse is one of the buzzwords in the financial world, especially when it comes to investing. Since Facebook’s (now Meta) announcement to start the process of building in that direction, such technology gained prominence. Today, millions of people around the world are already more familiar with this idea.
While interest is growing around the world, it is also growing among holders of large sums of capital. A growing number of investors are realizing the future potential of the technology, especially with the injections being made by large technology companies. For many, investing in the metaverse today is like being able to invest in the big tech companies 20 years ago.
Although the metaverse is an idea that is far from being realized, this fact does not prevent it from being a millionaire market. Investment possibilities are abundant and many of them do not discriminate against investors, even if their investment amounts are low. In this article we review some of the main ways to invest money in this technology of the future.
Top 5 strategies for investing in the metaverse
Unlike other sectors, investing in the metaverse is not reduced to a single option, but to a wide range of possibilities for all tastes. In that sense, both people who love the traditional market and those who bet on new technologies such as decentralized finance have their spaces.
In this way, everyone can put capital into this technology without leaving their areas of preference in terms of investment philosophy. This is because the metaverse is a technology that will cover the most diverse aspects of people’s social, cultural, economic or sports life.
1) The MetaverseLife investment fund
The first of the options for investing in the metaverse is through the exclusive MetaverseLife investment fund. This fund was launched by the popular broker eToro earlier this year 2022. It is a kind of a basket in which the shares of different companies directly related to this technology are included, as well as the main cryptocurrencies that make up the most popular projects of the metaverse.
With MetaverseLife, investors who wish to gain exposure to the metaverse will be able to do so with simplicity and having the extra security provided by asset diversification. The assets that make up this fund range from Meta and Roblox in the traditional stock market world, to Decentraland’s Mana and Sand and The Sanbox in the cryptocurrency space. Other big-name companies whose stocks are featured in the fund include Amazon, Microsoft and Apple.
Investors’ exposure to the metaverse with this broad portfolio is designed to be long-term. With this tool, the possibility of investing safely in the metaverse is much greater than investing in stocks in a particular way. The diversification of assets allows the investor to have a broad and balanced exposure to an entire sector.
MetaverseLife focuses on investing in the metaverse as a whole, allowing the poor performance of a particular company to be offset by the hypothetical rise of others.
> Open your free account at eToro.com to invest in MetaverseLife <
2) Investing in cryptocurrencies of the metaverse
The second of the options when it comes to investing money in the metaverse is through cryptocurrencies and tokens. Enthusiasts of the technology surrounding cryptocurrencies and their blockchains consider this to be the tool par excellence for developing the parallel digital world. The qualities of security, decentralization and privacy would be the main basis for metaverse platforms.
Within some blockchains such as Ethereum, there are several platforms called metaverse that have been working with considerable success. Among them, Decentraland and The Sandbox stand out , along with others. Each of these metaverse platforms has native coins, which serve as internal exchange currencies and investment tools.
As the popularity of these platforms grows and more users join them, so does the adoption of their tokens. In that sense, investing in metaverse cryptocurrencies, now with an outrageously low price, can become a profitable investment in the future. Among the most prominent coins in this sector we can name the following:
- ApeCoin (APE).
- Decentraland (MANA).
- The Sandbox (SAND).
- Axie Infinity (AXS).
- Enji (ENJ).
All of the above cryptocurrencies are available through the broker eToro, the favorite and recommended option by INVETOR TIMES. This is an investment platform used by more than 20 million users, based in London and authorized by CySEC and the FCA (the UK regulator).
> Sign up at eToro.com to invest in metaverse cryptocurrencies <
3) Investing in shares of companies linked to the metaverse
The third of the ways to invest in the metaverse, and probably the most important, is through the purchase of shares. Many companies are involved in the creation of the metaverse. However, the level of prominence varies depending on the level of commitment those companies have to the metaverse.
As a result, some investors are more selective in choosing the companies from which they will buy shares. In this case, just the opposite happens as with funds, i.e. if an investor places his capital in a fund and 80% of the companies represented go down and a few go up, the latter will be dragged down to the average. Thus, the investor misses the opportunity to earn returns with the shares of a leading company.
That said, it is stressed that such individual companies cannot be chosen at random to invest in the metaverse. Those selected must be the most recognized and those with the greatest commitment in dedication and injection of money for the development of the technology that will make the alternative virtual world possible. These companies include the following:
- Unity Software.
Find the best broker to invest in Metaverse companies
When it comes to investing in Metaverse companies stocks, choosing the best possible investment platform is a vitally important aspect. Below you will find the stock brokers we recommend to our readers, taking into account the following criteria:
- Security and regulatory aspects – All the brokers we recommend are strictly regulated, so that your assets are completely safe.
- Low commissions – We recommend only the brokers with the lowest commissions in the market.
- Usability and ease of use – All of the investment platforms we recommend are easy to use, even for the novice user.
REGULATED: CNMV (Spain), CySEC (Europe), FCA (United Kingdom), ASIC (Australia) & SEC (EE.UU.)
REGULATED: CySEC (Europe), BaFin (Germany) y ASIC (Australia)
4) Purchase of plots and properties in the metaverse
In this fourth strategy for investing in the metaverse, it is necessary to dive into the blockchain. It is no longer about investing capital in the native currencies and tokens of these immersive worlds. It is about investing in the internals in the strict sense of the word. This means trading more as an avatar than as a real-world person.
Thus, with the help of a wallet such as Metamask, one can log into Decentraland, for example, and make investments in this parallel world. To do so, the investor’s avatar must go to one of the districts he or she likes the most. In one case, he could move to Las Vegas City, buy plots of land and build a casino or a club. Similarly, there is the possibility of investing in real estate construction projects. The options are as wide as in the real world.
Properties and parcels on some of these platforms command high prices, but that value could increase as adoption grows. In such a case, getting in now could be seen as an early purchase that in the future would generate significant income in the form of a return. Space on these platforms is limited, so in the future it will be difficult and expensive to get a land lot in certain districts.
5) Investment in non-fungible tokens
The last of the ways to invest in the metaverse has to do with the purchase of non-fungible tokens or NFTs. These are the basis of the commodities that avatars will use, so that market will become one of the most booming ones. Put simply, NFTs are the digital equivalent or mirror of the natural composition of commodities in the real world.
The qualities that blockchain gives to CFNs will allow products and services in the metaverse to be unrepeatable and their ownership will be guaranteed. Thus, each item will be unique in its style and will be as varied as the goods themselves surrounding real-world commerce. That is, avatars will use everything from clothes, glasses, watches, shoes, art objects, weapons and a long list of items.
Investing in rare NFTs, such as a limited edition Ferrari that can then be sold to a collector avatar, can be a very profitable play. With this type of investment in non-fungible tokens, the possibilities are as wide as human tastes and consumption tendencies. To get an idea of the scope of this, it should be noted that even perfumes and body creams for avatars will be traded in the metaverse in the form of NFT.
What is the metaverse?
The metaverse, in the strict sense of the word, is a series of digital platforms where users can and will be able to interact. They will be able to attend any activity and perform any number of tasks, from going to a concert to completing the workday. In these scenarios, people will be able to interact, both with the environment and with other users, by means of avatars.
“Currently, the metaverse represents a multibillion-dollar business. However, that figure could multiply and reach more than a dozen trillion, according to Citi.”
Such a digital world would be made possible by the convergence of multiple technologies such as augmented reality and virtual reality. The environment is created by these virtual technologies and is the place where users will interact. Many consider it as the new era of the Internet and the socialization of people on the network.
It should be noted that the most basic details of what the metaverse will be like are unknown. This is due to the simple fact that it is a technology that is just under construction with tools whose level of development is low. What is almost a consensus is that it will not be a single platform, but that there will be a multitude of versions. Moreover, it is taken for granted that the interaction will be eminently economic and financial, but also cultural, sporting and other types of interaction.
At present, it is a business of hundreds of millions of dollars in capital that is invested in the various forms of investment. But in the future it could reach $13 trillion dollars. It should not be lost sight of the fact that at this moment the situation of the stock and cryptocurrency markets represents an unparalleled buying opportunity, as we will see a few paragraphs later.
The metaverse in pop culture
The idea of the metaverse goes back decades, when its use was restricted to the area of science fiction. Basically, it is a reality other than the existing world or a virtual world in which users are represented by avatars. A parallel social scenario was one of the biggest pop culture dreams of the late 20th century.
The best known cases are the novels Ready Player One by Eric Cline and Snow Crash by Neal Stephenson. These are joined by some productions such as the Netflix series Black Mirror or Amazon’s Upload. Minority Report, Iron Man and Smart House are also considered as some of the productions related to that vision of immersive technology of the future.
With these and other abundant examples, it can be said that the idea of the metaverse is not new at all. Even, if one goes further back in time, it is not an exaggeration to say that religion is a variety of imaginary very similar to the metaverse. In the celestial world, (beyond the real world) people are represented by their souls, entities that would be equivalent to avatars.
Seeing in perspective this vision of the metaverse in the social conscience, it simply changed from the sphere of science fiction to the technological one. Now, large science-related companies are building this parallel virtual world (or extension of the material world) with the help of important technological advances such as extended reality.
Is it a good time to invest in the metaverse?
This is an inevitable question in the face of an option that is shaping up to be one of the most talked about in the investment world. The short answer is that we could find ourselves at a historic moment to invest in all things metaverse.
“The opportunity to invest in the metaverse is unrepeatable due to the low stock and cryptocurrency prices of the major platforms”
The first thing to keep in mind is that both the stock market and the price of cryptocurrencies are bullish. That is, both markets have a general long-term uptrend, which are interrupted by short periods of correction. Correction periods, or dips, are generally interpreted as a buying opportunity by investors.
Currently, both the financial markets and the crypto market are in the depths. Particularly technology stocks in the Nasdaq 100 have been suffering sharp pullbacks as a result of U.S. monetary and fiscal policies. The latter are reportedly pushing the U.S. economy to the brink of recession.
At the other extreme, the crypto market is down due to a number of combined factors, most notably the catastrophic fall of Terra. Bitcoin, the largest cryptocurrency in market capitalization, is down more than 50% compared to its all-time high of 2021. All of this can be interpreted to mean that the opportunity to invest in the metaverse is unrepeatable due to the low share and coin prices of the major platforms.
How long will it take for the metaverse to arrive?
When it comes to investing in a company or set of companies developing a technology, the most important thing is to know the viability. In that sense, investing money in a technology without having any idea of the date of arrival or even the probability of being developed at some point does not seem like the best decision.
As far as the metaverse is concerned, there are many large companies that are betting billions to bring their projects to fruition. Hence, investing in the metaverse can be considered more than safe, since the technology is in the process of being created by valuable renowned companies. However, the certainty of arrival does not translate into full knowledge of the date.
Creating such immersive technology will not be easy. It should be kept in mind that many of the technologies that will be central parts are also in the embryonic stage.
“It is very likely that a complete build out of the metaverse will take years or even a decade. There are a significant number of hurdles to overcome, starting with the fact that the world does not yet have an Internet infrastructure capable of supporting millions of people entering the metaverse at the same time and from different locations.” This last point is highlighted by Floyd Blake in his book Advanced Strategies for Investing in the Metaverse.
Risks and important aspects when investing in the metaverse
As already stated, the metaverse, in the strict sense of the word, is under construction. Its arrival should happen in about a decade. But the already existing platforms can give a rough idea of what some regulatory issues will be like. The fact that in these virtual worlds it will be possible to buy, sell, work and interact in different ways makes regulations a necessity.
It is to be expected that in the metaverse (just as in social networks) there will be numerous problematic characters. Governments in each country will need to work on various regulations to prevent racism, harassment and hate speech in general from taking over these platforms.
The issue is that the technology as such does not yet exist, and one cannot guess at all the laws that will be needed to regulate it. However, there are 5 steps that are intuited to be necessary for investing in the metaverse to have guarantees. These steps are:
- Rules and regulations.
- User protection.
- Appropriate penalties for violations.
- Complete identification of users (KYC).
- Restrictions on use.
Many of these regulations such as KYC identification will eventually cause discomfort in terms of privacy rights. This is a debate that is already looming and could heavily influence the shape of the metaverse.
We cannot forget the issue of advertising, which is also closely related to investments. If there were regulations such as those currently approved in the EU (Digital Services Act) on the algorithms of the ads of technology companies, this could have a major impact on the business.
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