As an increasingly popular concept in the world of blockchain and crypto-currencies, the metaverse is emerging as an important digital revolution that could lead us to a different kind of virtual economy. That’s why it’s attracting many investors looking for the next golden investment. What is the Metaverse? What is it used for? How to invest in the Metaverse? Is it a risky investment? All our explanations.
What is the Metaverse?
Although it is difficult to define the metaverse, it can be described as a kind of virtual world that you can enter as an avatar. By creating a sort of bridge between the virtual and real worlds, the metaverse allows you to do many virtual activities such as communicate with other members, buy or sell digital assets, buy, sell, build or rent property or land, trade or create a business.
Virtual reality (VR), which is characterized by virtual environments that exist even when you are not playing or online, and augmented reality (AR), which mixes elements of the digital and physical worlds, are two promising artificial intelligence technologies that characterize the metaverse. Also, don’t forget extended reality (XR), which refers to all immersive learning technologies such as VR, AR and MR (mixed reality) that add to or simulate reality through digital media.
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What platforms should you invest in the metaverse on?
If you want to take advantage of the metaverse, you should know that there are several ways to invest in the metaverse. Depending on your financial goals, capital, as well as your strategy, you can opt to invest in the metaverse via:
- a popular crypto-currency or token that is heavily used in a virtual world;
- an NFT (non-fungible token) which represents a virtual asset that can be bought or sold in the metaverse;
- a company that supports the development of the metaverse and our interaction with this new world;
- an ETF (exchange-traded fund) that groups together companies dedicated to the metaverse sector;
- a financial derivative such as CFD (Contract for Difference) or futures on crypto-currencies.
So, depending on how you invest in the metaverse world, you can use:
- Exchange brokers (eToro, XTB, FX Flat, Saxo Bank, etc.);
- centralized or decentralized exchange platforms (Binance, Kraken, Bitpanda, OpenSea, SuperRare, Rarible, etc.);
- or ETF providers (Proshares, First Trust Advisors L.P., Roundhill Investments, Evolve ETFs, Horizons ETFs, etc.).
- Is the Metaverse a risky investment?
Rise Of The Metaverse : How To Invest In It ?
Although promising and growing rapidly, the world of the metaverse remains a new concept that is still in the experimental phase and could take many years to fully develop. Moreover, many consider that it is a world that would be difficult to adopt by the majority, which makes it a risky investment. It is also important to remember that the value of assets related to the metaverse world is not based on anything really concrete and that it is mostly market sentiment that moves prices. Values can therefore rise or fall very quickly.
Nevertheless, it is an investment opportunity that seems to appeal to many investors who believe in the potential of this new world as our society becomes more and more virtual and connected. In addition, there are many, many players working to make the metaverse a reality, as this CB Insights study shows, and that makes it possible to invest in different sub-sectors. However, like any sector that is growing rapidly in popularity, there will be winning investments as well as losing ones and there is no guarantee that you will select the right one.
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What precautions should I take before investing in the Metaverse?
First, it is important to understand the risks involved in investing in the metaverse, as well as the risks associated with the financial product or investment method you will use to profit from the metaverse. Then, you need to be sure that this level of risk matches your investor profile. As with any investment, you also have to accept that you may lose your entire capital by betting on the metaverse. This is why it is important to only invest the money you are willing to lose and never borrow to invest. Finally, you must choose a secure and reliable platform to make your investment in the best conditions. For this, it is best to choose a platform that is regulated and authorized in your area. For example, you can consult the Register of Financial Agents (Regafi) or the list of PSANs approved by the Autorité des Marchés Financiers (AMF).