How to Invest in Metaverse

Metaverse has something to offer and Investors may like it.

The metaverse has various definitions. However, it is widely seen as a successor-state to today's mobile internet, with a plethora of interoperable and persistent virtual worlds that will be fully integrated into the physical world as well, resulting in the creation of a new media and economy for work, leisure, and invention.

The metaverse is a notion of an online, 3D, virtual realm that connects users from all walks of life. It would link many platforms, similar to how the internet connects several websites using a single browser.

The concept was developed in Neal Stephenson's science-fiction novel Snow Crash. While the concept of a metaverse was originally considered science fiction, it now appears that it may become a reality in the future.

Augmented reality will power the metaverse, with each user managing a character or avatar. Take a mixed reality meeting in your virtual workplace with an Oculus VR headset, finish work and relax in a blockchain-based game, and then manage your crypto portfolio and money all from within the metaverse.

According to Reid Menge, Co-Portfolio Manager of the BlackRock Technology Opportunities Fund, the metaverse may sound futuristic, but the investment opportunities are here and now. He talks about how to get into the next great digital frontier and how to invest in it.

To begin 2022, technology equities have taken a hit. Investor fears about how increasing interest rates would affect these companies' long-term cash flows are the main issue. While rate jitters may continue to drive volatility in technology stocks, we are optimistic about the sector's long-term worth. The metaverse is one area that has gotten a lot of interest.

Top tech corporations including Meta, Google, and Microsoft have all invested in Metaverse-related technology, and this Metaverse could be a $8 trillion potential says, Goldman Sachs.

Microsoft's $69 billion acquisition of game producer Activision, the company's largest to date, is likely to provide it with massive Metaverse exposure. Even Apple's CEO, Tim Cook, believes the Metaverse has "a lot of potential."

And it's not just IT firms. Institutional investors such as Blackrock are also on the lookout for investment opportunities. So, how can the common investor get involved in the development of this revolutionary technology in its early stages?

Taking advantage of the situation

Why is widespread acceptance of virtual worlds finally becoming a reality? Virtual worlds have existed for decades, but why is it finally becoming a reality? There are three main causes for this:

-         It's achievable thanks to next-generation electronics and higher computational power.

-         The COVID-19 crisis hastened the transition to a digital lifestyle. People prefer to work, shop, and socialize from the convenience of their own homes.

-         Cryptocurrencies may make it possible for transactions to take place in the metaverse in a smoothly and globally.

Best ways to invest in metaverse:

1.     ETFs (Exchange-Traded Funds) 

Currently, the most convenient way to invest in the Metaverse is through an ETF (exchange-traded fund). Because ETFs are diversified, they can reduce volatility, lowering risk exposure in the market. The Roundhill Ball Metaverse ETF (META) fund is currently available for purchase straight through your brokerage account. It is currently the largest and oldest fund, focusing on gaming, IAAS (Infrastructure as a Service), and computer hardware companies. A few out of the numerous EFT opportunities available are:

-         NVIDIA Corp: having $745.0 billion in market capitalization, Nvidia (NVDA) has long been regarded as one of the greatest long-term semiconductor investments. Its move into the worlds of artificial intelligence (AI) and other fast-processing processors makes it a major participant in the metaverse stock market, which is unsurprising.

The chipsets developed by NVDA are already being used in a variety of servers and other centralized computers that perform sophisticated calculations. Edge computing solutions run by companies like Fastly fall into this category. Nvidia is almost certain to be a major winner from the metaverse revolution, given its leadership position and the necessity to move quickly.

Another reason for its bright future is the anticipated acquisition of ARM Holdings by SoftBank Group.

-         Roblox Corp: With a market value of $47.5 billion, this video game is topping the charts.  Although a video game may seem an unusual choice for Gucci to start an exclusive event, it demonstrates the metaverse's impending influence and how Roblox (RBLX, $77.99) is helping to shape it.

RBLX appears to be a video game on the surface. It's also a pretty popular one. In the second quarter, the company had 43.2 million daily active users who accumulated 9.7 billion hours of engagement.

-         Microsoft Corp: has a market value of $2.5 trillion. These numbers present a pretty impressive and attractive option for wise investments.

When Satya Nadella took over as CEO of Microsoft (MSFT, $336.06), he completely transformed the corporation. His foresight enabled the company to transition from the PC age to the cloud computing behemoth it is today. And he can change the metaverse in the same way.

Microsoft has already established Teams and the Office 365 software package as the go-to productivity platform in our new work-from-home environment. MSFT has a commanding lead in metaverse stocks because of its dominant position and continuous adoption by consumers and enterprise users. And the business is capitalizing on the opportunity.

-         Meta: having $934.3 billion in market capitalization, meta seems to be amongst the best EFT’S to invest in.

When Mark Zuckerberg and the newly renamed Meta (FB, $341.13) purchased VR start-up Oculus in 2014, they set the groundwork for the company's metaverse vision. Overall, Facebook has struggled with the division's social media operations, and it has always appeared to be a fad for the company.

Zuckerberg, on the other hand, might be getting the last laugh if Meta stocks (Facebook) stock rebounds.

2.     The Virtual Land Gold Rush

According to a CNBC report, virtual property prices have increased by as much as 500 percent since Facebook's switch to its new avatar, Meta, demonstrating the social media giant's significant interest in the metaverse realm.

Simply described, these are plots on digital metaverse platforms that are purchased with cryptocurrencies as non-fungible tokens (NFT). As a result, they are one-of-a-kind, tradeable digital assets with blockchain ownership records. The owners of the land can sell it on the secondary market through a third-party exchange or the metaverse ecosystem.

Companies are racing to stake as much virtual land as possible, and they're spending millions to do it. Pavia, an NFT project with 100,000 land units, has already sold more than 60% of its lots. It's built on the Cardano blockchain and has over 8,700 individual NFT landowners.

Decentraland is another popular initiative (MANA: A cryptocurrency that facilitates purchases of LAND, as well as virtual goods and services used in Decentraland). Approximately 36 million MANA is now held by roughly 7,000 wallet addresses. Decentraland is receiving a lot of interest from institutional money and celebrities alike as the crypto market recovers from its recent fall.

Purchasing virtual land is still considered risky, as it is still in its Wild West days but can yield high returns on investment soon enough.

3.     Digital Assets like Cryptocurrencies and NFTs

The Metaverse's money is cryptocurrency, and each Metaverse has its own set of coins. They're used to make payments for everything from NFTs to virtual real estate to avatar shoes.

For example, MANA, Decentraland's native token, can be used to buy and sell anything on the platform. Another popular Metaverse uses SAND, the Sandbox's native token. Cryptocurrency is the Metaverse's currency, and each Metaverse has its own set of coins. Everything from NFTs to virtual real estate to avatar shoes is paid for using them.

MANA, Decentraland's native token, for example, may be used to purchase and sell anything on the platform. SAND, the Sandbox's native token, is used by another popular Metaverse.

Investors can obtain exposure to the virtual world by using cryptocurrency as the primary mode of payment within the Metaverse. From virtual land to concert tickets, blockchain and NFTs will authenticate ownership and act as contracts. MANA now has a market capitalization of $4.11 billion and is trading at $2.25 at the time of writing. It is one of the more well-known projects, and it is based on the Ethereum network.

4.     Investors Can Diversify Their Portfolios in Other Ways

There are options for investors who believe it is still too early to invest in the Metaverse. During downturns and periods of rising inflation, some of these alternative assets have traditionally been shown to be less volatile.

Contemporary art, for example, has outperformed the S&P 500 by 164 percent from 1995 to 2021. As a result, it's understandable why millionaires and celebrities alike are investing in alternatives such as art.

Masterworks.io is one platform that exposes investors to art. With over 300,000 customers, this $1 billion fintech allows you to participate in this expanding asset class. Million-dollar paintings are securitized, and investors can buy shares exactly like stocks.