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The Metaverse: An Insight for Investors

Insight for Investors

Over the past year the Metaverse has become somewhat of a buzzword, but is it really worth all of the hype?

Everyone is talking about Mark Zuckerberg and other tech giants’ like Microsoft’s substantial investment in this future technology.

Deemed by some to become the next big thing in online tech, as investors we can’t ignore its development, but given its infancy, is it too early to be adding Metaverse stocks to our portfolio?

First, let’s explain what the Metaverse is.

An evolution of the internet, the long term vision for the Metaverse is that it will become a life-like virtual dimension where people can live as they would in the real world, going to work, spending time with family and friends, shopping at popular stores, investing in the market, going to the gym, playing sports and attending high profile events.

In this digital world physical, augmented and virtual reality converge, accessed by users through a headset that allows them to enter the online environment. Each user will have their own 3D avatar and use a microphone and motion sensors to control their actions and communicate with others. To some, it may feel like it’s straight out of a sci-fi movie, however it’s not going to disappear anytime soon and is believed to be the way of the future.

Many will go further to say that the Metaverse will replace existing media channels, to become the dominant platform, although we are certainly years away from seeing this become a reality. While the Metaverse technically already exists, it is extremely immature. If you think about the internet 15 years ago, it was accessed predominantly for leisure, however it now takes center stage in an organisation’s marketing strategy.

What technology is currently being developed?

To power the Metaverse, the fundamental building blocks include augmented reality (AR) and virtual reality (VR) technologies, such as AR/VR smart glasses which can be paired with devices we use daily, such as smartphones, tablets and computers to enter the virtual world. While some of this technology has been developed, it needs to be fine tuned before it’s ready for mainstream use.

Already in 2020 the worldwide spend on the Metaverse was $12 billion in 2020 and is expected to increase to a whopping $72.8 billion in 2024. Excitement is building among consumers who are eager to experience this revolutionary technology, although it’s expected to take up to a decade for the full vision to come to fruition.

Many new and innovative products will need to be created to support the Metaverse infrastructure, driving the expansion and growth of these sectors. Hardware engineers are working to produce the necessary cameras, motion sensors, projectors and tracking devices to allow users to feel immersed in their virtual environment. Software developers are creating countless applications to build the Metaverse and the privacy of users is being addressed.

How can you invest in the Metaverse?

There are several ways that you can invest in the Metaverse, including purchasing Metaverse stocks, Metaverse coins, Metaverse NFTs, and Metaverse ETFs. Although it’s a relatively new concept, you’ll find there are many prominent companies playing in the arena.

Roblox, Match Group, Nvidia, Unity Software, Microsoft, Apple, Netflix and Disney are amongst some of the large corporations investing significantly in the Metaverse. Facebook alone has invested billions of dollars into the industry, which is expected to grow exponentially as greater investment is made to accelerate technological developments.

Virtual goods such as NFTs (non-fungible tokens) that exist as cryptographic tokens on a blockchain are already being traded online using digital currency. Platforms like OpenSea and Mintable allow users to trade online using digital currency. NFTs represent items like a digital artwork, event ticket, or ingame feature, and will feature in the Metaverse allowing users to purchase items inside of the platform.

Is now the time to invest or should I wait?

There’s no universal answer as to whether you should invest in the Metaverse now or wait, however much of the decision will come down to your risk profile, your goals, and stage of life you’re in, as to whether you can weather the highs and lows that are likely to come as the industry finds its feet and continues to evolve its vision and technological requirements.

As with any other stocks, it’s important to do your due diligence and thoroughly evaluate your investment decisions before you make them. This includes speaking to a financial advisor to assess what is the right choice for your situation. However there is no shortage of corporations to choose from, should you decide that investing in the Metaverse is for you.

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