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Beginners Guide to Investing in the Metaverse

By August 22, 2022September 14th, 2022No Comments
Invest in metaverse

Overview of the Metaverse

The world was taken by a storm when Facebook re-branded itself as “meta”, within no time metaverse became a synonym for the web3.0 series. Every company that is making its presence felt on the web is directly or indirectly associated with the multi-verse to keep itself abreast with technology and connect at a deeper level with its end consumers. 

While on one hand, fashion brands have been conducting virtual fashion shows the other side hundreds if not thousands of people from across the globe are attending online concerts. The metaverse has something to offer to everyone in its virtual world.

Now that companies are making their way to the virtual space, individual investors as well are finding their way to invest and make the best out of the situation. There is an upward swing in the trends of investments in the metaverse, the reasons are a few: 

Metaverse’s association with blockchain and crypto is one of the main reasons to consider it as a suitable investment platform. In the metaverse, smart contracts and NFTs are essential for purchasing goods and exchanging them between different virtual spaces. For those interested in investing in the metaverse, NFTs and metaverse cryptocurrencies offer ideal instruments. Virtual real estate platforms such as Decentraland and Sandbox exhibit the potential for growth of the metaverse. 

Invest in metaverse - ways

Best Ways to Make Investments 

Metaverse has become a popular choice among investors for interesting opportunities to invest. Institutional investors are joining the metaverse investment game as well. There are many tech companies that have active investments in metaverse projects. A novice investor may find it slightly overwhelming to begin investing however with the right knowledge and perspective there are many options to invest. 

Purchase in-game Non-Fungible Tokens (NFTs)

The use of NFTs is two-fold, one is in the form of currency to purchase land and other virtual assets while the other is to buy NFTs of metaverse artwork, music and other collectables. One example is the world-famous art gallery auction firm – Sotheby’s; it has a digital art gallery in Decentraland known as Sotheby’s Metaverse. You can purchase the NFTs of this digital art. Brands such as Gucci and Adidas also offer merchandise in the form of NFTs. To purchase NFTs in the metaverse, you’ll have to login and connect the cryptocurrency wallet to make a purchase. 

Purchase Metaverse Tokens

Investing in the metaverse is made easy through the purchase of metaverse tokens. Intriguingly, purchasing metaverse tokens does not involve any complicated steps. To buy land in the metaverse, you’ll need to choose a metaverse platform and login. Popular tokens in the metaverse are SAND and MANA. All you have to do is go to one of the virtual neighbourhoods such as Sandbox, Decentraland and Axie Infinity through their respective websites, choose an avatar and then navigate the world. A few exchange companies you can refer to are – Coinbase, Revolute, Binance, Nakamoto, WazirX, Crypto.com and CoinSwitch Kuber among others. 

In the metaverse, these tokens are the primary form of payment, these tokens offer the right avenue for investors to invest in the metaverse. With time, these tokens are bound to grow in value. The metaverse tokens, however, much like cryptocurrencies are variable thus these too have to take on the risk of price uncertainties. 

Purchase Virtual Land (also sold as NFTs)

To purchase land in the metaverse, you’ll first have to choose a platform, you can choose from Sandbox or Decentraland. The metaverse is the same as the real world when it comes to researching real estate. In the metaverse, you can use sites like OpenSea.io or NonFungible.com to compare similar properties and determine whether a real estate purchase is a good deal. You can check comps, or compare the values of similar properties, for metaverse land on these sites, similar to Zillow in the real world. When you buy land in the metaverse, you’ll receive an NFT that represents the land you purchased.  

Apart from the first choice of tokens, land and NFTs, one can also invest in other avenues such as:

Investments in Metaverse Index (MVI)

Much like the stock market indices that capture the trends of the companies in the nation, the metaverse index (MVI) captures the trends in entertainment, business and gaming that are moving to the virtual universe. As the volatility of metaverse tokens has been significantly reduced, the MVI reduces the risk associated with purchasing them. The MVI consists of the trends of all the top-performing metaverse tokens.

Metaverse Stocks

Metaverse stocks are those stocks of organisations that are actively involved in the development of the metaverse. The organisations could be engaged in virtual reality (VR) wearables production, networking technologies or 3D rendering applications, etc. The most popular stock options in this space include Roblox, Apple, Facebook, NVIDIA and Unity. Metaverse ETFs or brokerage can be used to purchase these stocks. 

Exchange-Traded Funds (ETFs)

Do ETFs, take the top place when it comes to the dilemma of where and how to invest in the metaverse? ETFs are undoubtedly an easy solution to reduce volatility which in turn lowers the risk of exposure. To invest in an EFT, one can use a brokerage account. In terms of size, the ETF fund is currently the largest and focuses on computer hardware, gaming, and IaaS. A notable ETF platform for investing in the metaverse is Roundhill Ball Metaverse ETF.

Sell or Rent Metaverse Experiences

Metaverse experiences are similar to real-world experiences in that they are full of opportunities and possibilities. Yet another form of investment is through these personalized experiences; you can customize virtual land and/ or rent these spaces for business or entertainment purposes. Not just that, you can also rent out billboards on these properties for virtual advertisements as an investment opportunity.  

Looking Ahead 

Regardless of investment opportunities, the Metaverse itself is still in its infancy, which inevitably gives investors a lot of uncertainty when making investments. As a result, before investing in valuable assets in the metaverse, investors need to consider every aspect; detailed information, keep up with the trends and up-to-date knowledge. Metaverse already has a lot of options for investments from virtual land to NFTs. It is the choice of an investor to decide what and where to invest. These investments will only further grow with time as the metaverse goes mainstream. 

Disclaimer

The information and material on this blog are intended for information purposes only. While Purple Quarter (we) uses reasonable care in compiling and presenting the information and material on this blog. We make no representation or warranty whatsoever with respect to the accuracy, currency, completeness, adequacy and so on. This blog should not be construed as an opinion or anything else whatsoever. It is collated of various inputs available online.

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