The Metaverse is now a multi-billion-dollar investment opportunity, and across 2021, mention of the term increased exponentially during board meetings and earnings calls, and investors are taking notice.
The Metaverse has also transformed the economy in two ways – first, by providing an alternative investment instrument by way of blockchain, and second, by opening up new asset classes. All of this translates into a bullish environment with moderate to high risk appetite.
Can You Invest in the Metaverse?
The answer is a resounding yes. The Metaverse refers to a decentralized, immersive universe powered by 3D visualizations and experiences at the front-end and a blockchain-based governance system (often known as a decentralized autonomous organization or DAO) at the back-end.
This means that for a decentralised metaverse to work, multiple users must have a stake in its operations by investing in its native cryptocurrency token, which is intrinsically linked to the platform’s architecture.
In short, the functioning and success of a metaverse relies on investment activity. All the top metaverse platforms today have their own cryptocurrency tokens for investment, which are in high demand.
How Can You Invest in the Metaverse? 6 Options to Explore
The good news is that metaverse investments are democratic in nature. Anyone can purchase crypto assets or a share of cryptocurrencies without a minimum entry threshold.
Unlike real-world economies, there are no geographical barriers and one can invest in metaverse crypto in any region. This could be a massive earning opportunity for those residing in locations without a mature stock or capital market of its own. There are six options when it comes to investing in the metaverse.
Buy metaverse crypto
Difficulty level: very easy
Purchasing cryptocurrency is one of the easiest ways to invest in the metaverse. All you need is a digital wallet to house crypto tokens and the ability to participate in a coin exchange.
Different countries may have their own regulations for participating in the exchange, such as identity and Know Your Customer (KYC) verification. However, these are usually quite straightforward and there are very few barriers to entry.
Some of the top metaverse crypto investors will find in nearly every exchange, including MANA from Decentraland, SAND from The Sandbox, BLOK from Bloktopia, and AXS from Axie Infinity. As metaverse platforms mature, their respective token values typically increase.
Acquire metaverse land
Difficulty level: easy to moderate
Buying land is the next best way to invest in the Metaverse as it calls for the same buying prerequisites as crypto. Once the user has a digital wallet in place, they can select an emerging metaverse platform, explore its layout and available parcels, zero in on the parcel they want, and make a purchase.
The process is relatively straightforward but involves more risk than pure-play crypto token investments as the value of virtual land depends on a variety of unpredictable factors such as the pace of developing adjacent parcels. However, it is among the most popular investment methods, and analysts believe the market could reach $1 billion USD this year.
Rent or buy prefabricated metaverse buildings
Difficulty level: high
Instead of buying land, one can also directly buy prefabricated structures that you can directly put to use. For example, an individual or business could acquire a virtual storefront and then use that space to showcase 3D digital replicas of their real-world offerings in the metaverse.
This investment method applies to a wide range of sectors, from retail to art and entertainment services. However, there are significant barriers to entry as the minimum investment threshold is quite high. One has to purchase a moderately large space to actually generate value in the metaverse using this method.
Purchase metaverse stocks
Difficulty level: moderate
Buying shares in a metaverse company is one of the easiest ways to invest in the technology as it does not require a person to handle cryptocurrency or even open a digital wallet. However, this investment option is moderately difficult as metaverse stock options are primarily meant for serious investors.
The value of crypto fluctuates dramatically and it is possible to turn a good profit in the short term. However, metaverse shares operate just like any other company and are tradeable on a traditional stock exchange.
Some of the leading stocks in this segment include Meta Platforms Inc. (FB), Electronic Arts (EA), Roblox Corp. (RBLX), and Nvidia (NVDA).
Invest in a metaverse ETF
Difficulty level: high
A metaverse Exchange Traded Fund (ETF) is an emerging investment instrument that allows you to purchase a collection of stocks that are dynamically traded by a dedicated fund manager.
ETFs are similar to mutual funds in that they curate a set of similar or thematically organized stocks into a single asset that provides relatively predictable returns. However, they differ as there is a dedicated fund manager who actively trades using the ETF and makes sure to maintain its optimal market value.
A number of metaverse ETFs have emerged in the last 12 months, including Roundhill Ball Metaverse ETF, Subversive Metaverse ETF, and ProShares Metaverse Theme ETF. However, difficulty is high as most ETFs have a minimum investment threshold of up to $1,000 and it is advisable to have prior experience in the stock market.
Create, buy and sell NFTs
Difficulty level: varies from easy to high
The last and possibly the most flexible way to invest in the metaverse is through non-fungible tokens (NFTs). You can create 3D objects and list them on metaverse marketplaces for sale, which is a technically challenging process. Or, one can simply buy NFTs and sell them for a profit, which is a simpler approach.
While this list is not exhaustive, there are plenty of investment opportunities in the metaverse, ranging from conventional stock options to high-risk, high-reward real estate.