While the so-called “Metaverse” isn’t necessarily a new term, it’s one that’s still commonly misunderstood and the subject of regular misconceptions.
For example, there now exists a number of different metaverses in the current digital ecosystem, from Facebook’s own trailblazing offering to others that have been integrated into third-generation blockchains and cryptocurrencies.
Similarly, although the metaverse is considered to be a western concept that’s exclusive to the developed world, it also continues to have an impact in emerging economies such as Africa.
In South Africa alone, the metaverse niche is expected to grow by an impressive 37.2% on an annual basis through 2023, before reaching $4,473 million by the end of the year.
OK, So What is the Metaverse?
You’ve probably heard the term ‘Metaverse’ used with increased frequency of late, and at first glance, this seems like a relatively simple concept to understand.
The word ‘meta’ is a simple prefix that means ‘transcending’, while the broader definition of ‘universe’ refers to a particular sphere of activity or experience. So, the metaverse describes an all-encompassing and transcendental realm that can take any number of different forms.
In more detailed terms, the metaverse is a hypothesized iteration of the Internet and one that can support a diverse range of three-dimensional environments and either virtual or augmented reality headsets.
Unsurprisingly, limited iterations of a metaverse have emerged during the digital age, most notably VRChat and the trail-blazing video game ‘Second Life’. As the name suggests, this title described an application that allowed players to create their own unique avatars and create a virtual life, in a completely authentic and immersive 3D setting.
Most recently, Facebook changed its name to Meta, as part of founder Mark Zuckerberg’s wider vision to create a hybrid virtual and corporeal realm that supplants the existing Internet and creates endless opportunities for users across the globe.
While Facebook’s iteration isn’t the only (or even the first) project of this type, it currently has the potential to be one of the biggest. Certainly, Facebook has a dominant global user base that includes 2.89 billion unique users as of Q2 2021, while it also owns the world’s biggest VR headset brand (Oculus).
In this respect, the Facebook Metaverse remains arguably the most exciting and widely publicised to date, while others are a little more niche in terms of their audience and wider popularity.
Take Nike’s rather unimaginatively titled ‘Nikeland’, for example, which is a virtual world based within the boundaries of the Roblox online video game platform. In this space, customers and players can interact in free sports games and engage with published content, while purchasing virtual sportswear and trainers to create their own bespoke look online.
BMW’s so-called “JOYTOPIA” is another highly engaging Metaverse project, and one that regularly provides users with immersive, virtual experiences. For example, it previously offered access to a completely unprecedented concert experience, where they could create avatars to get involved in an event that featured the legendary band Coldplay. Through these avatars, they could interact with one another and even dance along to the music, while enjoying everything from a first-person perspective.
Previously, the iconic ‘Epic Games’ brand announced a $1 billion round of funding for its own long-term metaverse vision, which will be based around the existing social experiences already available through games such as Fortnite, Rocket League and Fall Guys.
As we can see, each of these projects taps into the clear concept of the metaverse, albeit in their own unique and relatively niche way.
The promise is that Facebook’s larger and more sweeping iteration will provide an even more immersive realm for its users, one that realises the full potential of this exciting concept.
Trading in the Metaverse – What Will it Look Like?
One seminal issue facing Facebook’s metaverse is its centralised nature, which means that a large corporation retains control over its content and the digital personas that reside within.
This has partially helped to inspire the emergence of different blockchain metaverses, which are centred around cryptocurrency and create significant earning opportunities within a completely decentralised and anonymous space.
Two particular crypto metaverses stand out from the crowd, namely Sandbox (SAND) and Decentraland (MANA). The former features a strong virtual reality (VR) aspect, utilising gamification and the trading of non-fungible tokens (NFTs) to create lucrative assets and trade these for a profit.
As for the latter, this is also an NTF-focused project, but one that has also embraced concepts such as the sale of digital art and content and online gambling. With Decentraland, you can even buy pieces of virtual land and a range of additional digital assets, which is increasingly of interest to investors and financial market traders who are constantly looking to diversify their portfolios.
Of course, the distinction between investing vs trading is often subtle, but there’s no doubt that you can leverage the latter when navigating the metaverse. For example, aforementioned NFTs can be used to sell, buy and exchange an array of virtual assets in the metaverse, with the novel and unique nature of these entities commanding significant value in the marketplace.
Similarly, you can purchase and invest in virtual land through the Decentraland blockchain, with this holding a fluctuating market value and one that can appreciate significantly over time. Going forward, we’ll also see a growing number of virtual services packaged and sold through the metaverse, with this creating additional opportunities to invest in digital assets and the companies (and equities) that provide them.
You can certainly access a growing number of metaverse-affiliated stocks in 2023, while the Metaverse Index (MVI) also offers an opportunity to target a diverse selection of high growth equities while automatically minimising your exposure to risk in the marketplace.
Ultimately, there’s no doubt that the metaverse will continue to open up a range of diverse and lucrative investment assets, especially through blockchain-based ecosystems that are decentralised and enable individuals to invest safely and without the interference of third-party control.
Of course, this will also open up regulatory challenges as the metaverse continues to evolve, but investors will continue to monitor the space as it grows and diversifies.
