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What is the metaverse and can investors profit from it?

The metaverse has become the latest digital asset trend and mainstream companies including Apple, Facebook and Microsoft are keen to login.

The term has been around since the 1980s but advances in technology and backing from major companies is taking the metaverse to the mainstream.

Here is how you can get involved virtually and financially.

The metaverse is a virtual 3D world where people can play games, travel and socialize.

Defining the metaverse

The metaverse won’t be anything new to sci-fi fans.

The phrase has been around since the 1980s and was first coined by sci-fi writer Neil Stevenson in his 1982 novel Snow Crash.

It focused on a virtual place where people could create their own digital characters, known as avatars, to escape their dreary totalitarian world.

More than 40 years later, virtual worlds have become a reality with the launch of the metaverse, giving users a place to escape from the stress of real life as well as an investment opportunity for adventurous avatars.

The metaverse is a virtual 3D world where people can play games, travel and socialize.

It is described by some as the next stage of the internet or web 3.0, giving users a more immersive and interactive experience by creating their avatars that can interact in online worlds.

Parents of young children may have already come across the metaverse through games such as Roblox, Fortnite and Minecraft, where users create a digital version of themselves and socialize or build their own world.

There are also adult-focused metaverses such as Decentraland where users can buy and sell digital portions of land and virtual goods for their avatars.

Users can also access some of the meta worlds through virtual reality headsets

Users can also access some of the meta worlds through virtual reality headsets

How do you access the metaverse?

There isn’t a single metaverse but lots of different online platforms competing for your attention and money.

You can access these worlds through dedicated websites and may need to download software.

Users can also access some of these worlds through virtual reality headsets. Facebook, known now as Meta, is making a big push into this area with its Oculus Rift VR headsets.

Why are people interested in the metaverse?

Analysis by Bloomberg Intelligence suggests the metaverse is the next big technology platform and could attract online game makers, social networks and other firms to build a market worth $800billion in the next two years.

The idea is that people could hold business meetings, concerts and sports events virtually.

A company might buy space to host virtual events for their company which employees from all over the world could attend.

Users can even go shopping and try on virtual clothes to get an idea of ​​how they fit or look in real life.

There is also a cryptoasset element to it as many will have their own digital land to purchase, virtual currency to buy and sell goods or services or brands may create non-fungible tokens (NFTs) that can be displayed in these virtual universes.

Investing in these cryptoassets is a potentially risky way of getting investment exposure to the metaverse, but there are also mainstream brands interested in this area that can be backed on the stock market.

Users can even go shopping and try on virtual clothes to get an idea of ​​how they fit or look in real life

Users can even go shopping and try on virtual clothes to get an idea of ​​how they fit or look in real life

Which stocks could do well out of the metaverse?

There are plenty of major listed companies involved in the metaverse that you could invest in on the stock market.

It is still important to do your research and consider a company’s prospects and profits beyond its involvement in the metaverse, but a brand may still get a real-life boost from its involvement in virtual worlds.

Technology companies are increasingly getting involved, seeing it as the next space for social and business networking and keen to be at the forefront of internet innovation.

Facebook is predicted to become a big player in this space. It changed its name to Meta last year and signaled a shift toward creating virtual realms.

Microsoft has spoken about incorporating the metaverse and augmented reality into its Teams conferencing platform.

There are also rumors of an Apple-branded virtual reality headset, plus its popular smartphone devices and tablets may well be common points to access metaverse lands.

Some companies are already using the metaverse as part of their work and branding.

For example, drinks company Coca-Cola has created its own merchandise that can be purchased by Decentraland users.

Amazon has even launched its own metaverse to teach people cloud computing skills.

There are plenty of major listed companies involved in the metaverse that you could invest in on the stock market

There are plenty of major listed companies involved in the metaverse that you could invest in on the stock market

Gamers are an attractive market, as software companies and console makers have a dedicated user base who are used to interacting and playing games online.

There are established gaming firms that are already active in the metaverse. This includes popular youth-focused virtual platform Roblox, which already has millions of virtual worlds and experiences where people can socialize It even hosted a Gucci Garden last year to boost awareness and let users purchase digital Gucci products for their avatars.

Other gaming brands such as Electronic Arts – behind the popular FIFA football game – have described blockchain games, where players must earn in-game credits and currency to progress, as “the future of the industry.”

Companies such as Nintendo and Sony, may also benefit from people accessing the metaverse through their Switch or PlayStation consoles.

Investors could also consider the underlying technology needed to power a metaverse such as semiconductor chips, sophisticated 3D computer graphics and video, connectivity and cloud infrastructures and software.

This could mean backing listed companies such as Intel, Adobe and even Shopify which helps facilitate some of the online transactions and has a platform for users to sell NFTs.

It is vital to do your research so you understand a company’s prospects before investing.

What are the risks?

Investing in new technologies and early-stage companies carries extra risk, as they may not be proven to be successful and profitable.

This is a risk for established firms investing in the metaverse to consider but also something investors should bear in mind.

Some metaverse stocks may fall into the high-risk bracket, while other larger established companies operating in the space may only target it as a smaller part of their business and could offer exposure to it with less reliance on it for all their revenues or profits.

The fragmented nature of the metaverse is also a risk as virtual worlds that are popular now and being used or backed by major brands may go out of fashion, particularly if a new and better one is created.

As with anything, eToro highlights it is important to do thorough research into any company and platform before getting involved in the virtual world as you would in real life.

How eToro could help you invest in the metaverse…

The metaverse presents potential investing opportunities that could see you invest in both the technologies and how people are beginning to advance their interactions with the online world.

To invest in the metaverse, eToro lists all these stocks mentioned with 0% commission offering you the opportunity to build a portfolio of brands with this future in mind.

Discover eToro here.

Your capital is at risk. Other fees apply.

eToro is a multi-asset investment platform. The value of your investments may go up or down. Your capital is at risk.

Cryptoassets are highly volatile and unregulated in the UK. No consumer protection. Tax on profits may apply.

This communication is for information and education purposes only and should not be taken as investment advice, a personal recommendation, or an offer of, or solicitation to buy or sell, any financial instruments. This material has been prepared without taking into account any particular recipient’s investment objectives or financial situation, and has not been prepared in accordance with the legal and regulatory requirements to promote independent research. Any references to past or future performance of a financial instrument, index or a packaged investment product are not, and should not be taken as, a reliable indicator of future results. eToro makes no representation and assumes no liability as to the accuracy or completeness of the content of this publication.

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