The metaverse is a combination of several separate virtual worlds that people can access at any time through the web wearing a virtual reality (VR) headset. It is forecasted to become a multibillion-dollar industry, so it is no surprise that investors want to get involved.
Global enterprises including Mastercard, American Express, Meta, and food industry giants like Taco Bell and Pizza Hut have already filed metaverse trademark applications. With so much potential and immense growth, metaverse offers various investment opportunities. But what is the metaverse, and how can you invest in it? This post will cover what the metaverse is, its primary use cases, and how to invest in this virtual reality.
What is the Metaverse?
The metaverse is a virtual reality world in 3D, where each person is connected to it as an avatar – just like we can access different websites, people can access virtual 3D worlds online where they can interact wearing a VR headset. Each of these virtual worlds make up the metaverse. Users can buy digital assets in each world using digital currencies or fiat money.
Even though not yet fully developed, the idea is a virtual world where people can work, play games, shop, socialize or attend events or concerts with friends – anything that can be done in real life, but in this case, you do it as an avatar from the comfort of your own home.
In a business or social use case, we could socialize face-to-face or avatar-to-avatar in 3D rather than over a screen in 2D like Zoom call, where we can’t pick up on the body language. It enables people to connect in a more personal way while being in separate places.
What are some of the use cases for the metaverse?
The metaverse’s first and primary use case so far has been gaming. However, in the future, it can offer several other opportunities. For instance, the metaverse can be used to make online business sessions more personal as well as for collaborative projects and online shopping.
Let’s see what the future of the metaverse might look like and see which use-cases could benefit from the use of virtual reality.
The video game industry has been at the forefront of the expansions of the metaverse – a first significant use case – a made-up virtual world where we can simultaneously interact and play games in 3D – the gaming industry will continue to grow along with the metaverse.
Most people still use more traditional devices like a computer, mobile phone, or a gaming console, but the social aspect is already there. In gaming, users can talk to each other while playing together or purchase digital goods within the game with fiat currencies; for example, Roblox uses its own currency, ROBOX.
Metaverse games like Minecraft, Fortnite, or Roblox are some of the first and largest in the industry. Whereas the latter are all centralized companies, Decentraland is the first successful metaverse game by a decentralized autonomous organization (DAO).
Along with gaming, social interactions are a big part of the metaverse ecosystem, allowing users to communicate with others in different locations and interact “in person.” Metaverse takes online chats to the next level and adds a personal touch, making people feel more present.
Metaverse platform Decentraland has hosted various virtual events. In March 2022, major fashion brands from D&G to Tommy Hilfiger participated in the Metaverse Fashion week; people could attend the event simultaneously and socialize virtually.
What is more, Meta Horizon Venues offers the ability to attend events via a 3D avatar with a Quest 3D headset and allows attendees to chat together while at the virtual event. The MBA, for example, has already hosted several virtual live events on the platform.
Business and work
Zoom video calls and online conferencing became essential during the pandemic in 2020. They enabled the workforce to keep in touch with each and attend business-crucial meetings. However, 2D calls have limitations, excluding aspects like seeing each others’ body language.
The metaverse could reduce businesses’ operational costs as it minimizes the need to travel or use physical spaces. In the metaverse, we could collaborate, share presentations and information, instead of switching browsers and screens, just like in real life.
Moreover, as large parts of the workforce are working remotely from home or any part of the world now, it is unlikely that the typical office rules will return. Metaverse can take video conferencing to the next level, where we could attend the meetings as full-length avatars instead of a video call.
Shopping in the metaverse offers countless possibilities, which is why several retail brands from Nike to Gucci are getting on board. Shops can provide immersive experiences straight from the customers’ homes through real-time 3D shopping. People can shop in a virtual store in the metaverse, and get physical items delivered.
Users can see clothing in “real life,” wander through the shop, dress in a virtual fitting room to get a 360-degree view of the outfit or interact with virtual shop assistants. Brands can benefit from tracking customer activity, purchase history, and demographics to offer a more personalized shopping experience.
Manufacturing and production
Another growing and innovative use case of the metaverse is in manufacturing—a digital twin is a digital copy of an actual building in the physical world, either existing or new.
For example, a factory can build a digital twin of their manufacturing line and test different layouts and production conditions without disrupting the normal production process, saving time and money.
While the concept has been around for years, the popularity and accessibility of building digital twins are growing. For example, BMW Group partnered with Nvidia Omniverse to design a digital twin for their whole factory.
Enterprises are working on bringing the vision to life, supporting the metaverse’s further development. Along with technology development, the accessibility of the metaverse will grow, and more companies can afford to benefit. It is good news for inventors, as this immense growth opens up various investment opportunities—let’s see how to profit from this growing industry.
Since the metaverse is still early in its early stages, investments should be considered speculative. However, for those wanting to get on board early, a few different high-risk and moderate-risk investments are possible.
Note: Pivotal to investing in the metaverse is to remain cautious and patient to avoid common investing mistakes, as it might as well take more than a dozen years for the industry to develop fully. Businesses providing services to metaverse or metaverse businesses may go bust.
Unlike the real world, there are no limitations to investing in the metaverse, and anyone can purchase cryptocurrencies or metaverse non-fungible tokens (NFTs). It can be a huge earning potential for locations in developing countries without a mature stock market.
Six common ways to invest in the metaverse are:
- Invest in metaverse stocks;
- Invest in metaverse cryptocurrencies;
- Invest in a metaverse exchange-traded fund (ETF);
- Invest directly in the metaverse through NFTs;
- Buy metaverse land;
- Rent or buy metaverse buildings.
Investing in the metaverse is available for anyone, and you can choose the best for your risk tolerance and how much you want to invest. For example, you could buy metaverse stocks or invest in native cryptocurrencies, as there is no minimum spend.
Metaverse-related industries or technology companies are an excellent way to profit early, investing options range from easy to more complicated processes.
Below, we’ll bring out those six most common ways to invest in the metaverse:
1. Invest in metaverse stocks
One of the easiest ways to invest in the metaverse is to invest in metaverse stocks, as it doesn’t require the creation of a digital crypto wallet or a sign-up to a crypto exchange. You can invest in metaverse stocks the same way as when investing in regular stocks – by buying stocks of companies that support the metaverse development.
It is essential to remember that metaverse company shares fluctuate the same way as other companies trading on traditional stock exchanges, if not more. However, it is still often a more stable investment than, for example, investing in cryptocurrencies.
A few examples of metaverse stocks include Meta Platforms Inc. (NASDAQ: FB), formerly Facebook, AI computing company Nvidia (NASDAQ: NVDA), and Roblox (NYSE: RBLX), a tech company that operates a very popular human co-experience gaming platform.
Note: If you’re a beginner, a Revolut app could be a proper way to buy preferred U.S. stocks with ease.
2. Invest in metaverse cryptocurrencies
Most metaverse companies have their own digital currency or are using an existing cryptocurrency, so buying metaverse cryptos is another way to profit.
One of the reasons cryptocurrencies developed was to help the movement of the world to the virtual world. Using digital currencies in a digital economy allows borderless interaction and transactions, something fiat currencies can’t support.
For example, Decentraland is a virtual browser-based 3D platform with games like Genesis City that has hosted virtual events by prominent brands like Adidas or D&G.
With its cryptocurrency MANA on Ethereum, users can buy and sell plots of virtual land or choose to buy MANA crypto as an investment. Its price, however, can be highly volatile, making it a riskier investment strategy.
Another good example is Theta blockchain, a first-to-market content delivery network (CDN) for the metaverse – the company has its cryptocurrency, THETA. Buying their cryptocurrency is another way to invest in the metaverse.
As time goes on, new decentralized and centralized solutions will emerge along with their cryptocurrencies and, depending on their success, can reveal more investment opportunities in the long run. Metaverse investing requires people to remain curious and continuously explore new options.
3. Invest in a metaverse exchange-traded fund (ETF)
You can also invest in the metaverse through metaverse exchange-traded funds – there are already a few good ones to consider. If you don’t feel like investing in single stocks, are short on time, lack knowledge, or think cryptocurrencies are too risky, opt for a managed metaverse stock portfolio.
The future and success of the metaverse are still uncertain – investors looking to reduce volatility should think about metaverse ETFs that offer diversification. Metaverse ETFs include blue-chip tech stocks like Meta as well as growth companies.
Here are some of the top metaverse ETFs to consider:
- ProShares metaverse ETF;
- eToro Metaverse Life Smart Portfolio;
- Evolve metaverse ETF;
- Horizons Global Metaverse Index ETF;
- Defiance Metaverse ETF;
- Fount Metaverse ETF.
Note: You can conveniently invest in metaverse ETFs through a fully regulated and trusted broker Interactive Brokers (also known as IBKR).
4. Invest in NFTs
Another way to be a part of the metaverse growth is to create, buy, or sell non-fungible tokens (NFTs) – certificates of ownership registered on the blockchain.
The first example is buying land or digital real estate as NFTs. Some projects are selling virtual land or real estate through NFTs. For instance, Decentraland has previously sold virtual land through NFTs that go between $6,000 and $100,000.
Another use-case includes virtual marketplaces and apps like VRChat, where users can mint digital assets directly in the VR landscape. Nike, for example, has created their own virtual “Nikeland” and is making NFTs of its products.
Art galleries in VR are also good examples where investors can buy digital art in the form of NFTs. Even some brick-and-mortar museums are selling their artwork as NFTs in the metaverse.
5. Buy metaverse land
You could also invest directly in virtual metaverse land and real estate. Users can build art galleries, mansions, or houses on the virtual land they bought. For example, just like in the real world, you can buy a plot of land next to celebrities.
Buying land in the metaverse requires you to own cryptocurrencies first, as the ground is usually sold as an NFT and is available as parcels. Once you’ve registered your digital wallet and bought some crypto, you can invest in virtual land on the metaverse.
The process is somewhat more complicated, and investing in virtual land is more volatile and risky. However, the market is expected to keep growing, and the potential is high.
6. Rent or buy metaverse buildings
Another slightly more complex way to invest in the metaverse is buying pre-built virtual real estate. For example, you can acquire virtual land to create an NFT gallery or a virtual storefront to showcase your items in the virtual world.
It can be relevant to a wide range of sectors from art to shopping to entertainment. Again, this method is also riskier due to the industry’s newness, and you would have to purchase a notable space to generate value through this investment method.
Development of the metaverse requires several companies to provide external services to power the 3D visualization and experiences in a virtual environment in real-time. For example, just like the fashion industry needs clothing suppliers and manufacturers to sell their products, metaverse businesses will need energy, connectivity, or immersive hardware.
The metaverse is powered by 3D experience at the front end and a blockchain-based decentralized autonomous organization (DAO) at the back end, which requires immense energy consumption and design to offer its services. Many external businesses will try to support that.
For a decentralized metaverse to function, several users would have to have a stake in it by investing in its cryptocurrency linked to each platform. So, for this to work, metaverse companies rely on investor activity. As these organizations need investments to develop innovative solutions, buying their stocks represents enormous opportunities for investors.
Let’s look at some of the primary supporting sectors for the future development of metaverse.
- Metaverse interfaces: as the metaverse evolves, more and more different sub-ecosystems will emerge. For example, just like a company needs a website for customers to browse, in the same way, new metaverse businesses will have to have an interface that users can access at any time.
- 3D design and creation software: a virtual environment needs design and graphics to operate just like the real world and regular websites. Companies building virtual scenery, shops, roads, design houses, and other real estate or digital items will also grow.
- Data storage: metaverse will generate copious amounts of data and bandwidth, which companies must store. Metaverse will need alternatives to centralized storage space. For example, MEMO, a decentralized storage system still in its early stages, is pioneering Meta Storage, which offers metaverse companies help to store vast amounts of data.
- Eco-friendly innovations: in Big Tech, energy consumption is one of the most criticized downside and top concerns. Businesses that can offer eco-friendly practices and solutions will be recognized. For example, Meta has committed to zero-net emission by 2030 as they partnered with a new wind farm in Altoona, Iowa, in the US for renewable energy. Metaverse will have to find eco-friendly solutions to keep building their products.
- Hardware: immersive hardware products such as VR headsets will probably be a focal point and develop even further with other devices that include a sense of smell or touch to make the virtual experience even more real.
- Network requirements: fast broadband speed is crucial to support a fully-functioning real-time virtual reality world to transmit vast amounts of data. The current Wi-Fi network is unlikely to be able to support it, so significant improvements in Wi-Fi network speed along the development of the metaverse are necessary for everything to function smoothly.
- Data and cybersecurity: as more people use and experience the metaverse virtual worlds, their data and identity information becomes vulnerable. Cybersecurity companies will have a chance to offer their services.
These are just some of many use cases relevant to the metaverse development that are likely to continue to evolve and offer their external services. It also provides fantastic opportunities for investors to benefit early on. Moreover, you can choose a strategy that fits your investing style, risk tolerance, and budget.
Although it might take years or even decades for the metaverse to be adopted by the wider audience and implemented in all use-cases, there are excellent metaverse stock opportunities.
The best metaverse stocks to buy are from companies already thriving and spearheading the innovations in the virtual reality space. These companies are likely to grow exponentially as the metaverse universe develops.
Here are some of the best metaverse stocks to buy:
Meta (NASDAQ: FB)
Meta Platforms (NASDAQ: FB), formerly known as Facebook, was the first company to come up with metaverse with the concept we understand it as today. In 2010, Meta made its first significant investment in the virtual reality market when it acquired Oculus VR, a company that pioneered VR headsets, in a $2 billion deal.
A sizable chunk of Meta’s revenue is still generated through marketing ads on its social media platforms, Facebook and Instagram. However, in 2021, Facebook changed its name to Meta and announced plans to focus on the metaverse’s development.
Meta has generated more revenue than any other VR company via sales from the Oculus VR headsets. Moreover, Meta is investing heavily in creating other immersive software applications and anything related to the growth of metaverse. As the company doesn’t focus solely on metaverse, Meta stocks are an attractive option for more risk-averse investors.
Nvidia (NASDAQ: NVDA)
Another company to consider is Nvidia Corporation (NASDAQ: NVDA), an American technology company that has recently also focused on creating 3D content, specifically for the metaverse. Founded in 1993, Nvidia is an established company known for developing integrated circuits used in PCs and gaming consoles and for its quality graphics processing units (GPUs).
However, it also focuses on developing future applications: self-driving cars, cryptocurrencies, cloud gaming, and 3D content with the NVIDIA Omniverse platform for 3D simulation and design collaboration for content creators and companies. NVIDIA Omniverse makes it an excellent metaverse stock investment opportunity.
Cloudflare (NYSE: NET)
Cloudflare Inc. (NYSE: NET) is an American company based in San Francisco, California, founded in 2010 and provides services like content delivery network (CDN) and cybersecurity solutions for the metaverse needs. Its primary benefit is to make everything connected to the internet securely and fast, offering APIs and website security.
As the metaverse content needs grow, likely, companies offering services like Cloudflare will also increase.
Their unique content delivery network is designed so metaverse companies can deliver content quickly and without interruptions. Cloudflare offers cybersecurity and data storage, both beneficial solutions for the metaverse.
Unity (NYSE: U)
Unity Software Inc. (NYSE: U) is an American multinational video game software company founded in Denmark in 2004, now based in San Francisco, California. The company offers solutions for developers for the game production process for both 2D and 3D platforms.
Unity Software is a company leading the development of 3D software in metaverse space. Metaverse requires a lot of content – Unity has estimated that about a whopping half of 3D content today has been produced with its software, making it reasonable to say it’s the market leader and unique value proposition.
Roblox (NYSE: RBLX)
Roblox Corp. (NYSE: RBLX) achieved immense growth during the pandemic and grew in popularity. It is an online gaming platform top-rated among the younger population – users can interact in various games, socialize, play, and build virtual homes. Roblox was founded in 2006 and, in March 2021, was the first metaverse game company to go public.
Moreover, it isn’t just a gaming platform – world-renowned artists Tai Verdes, Zara Larsson, and Lil Nas X have hosted virtual concerts on the platform, and brand Chipotle has held promotional events on the Roblox platform. The average user age is also growing, indicating a growing interest and mainstream appeal in the metaverse.
There are various ways to invest in the metaverse, and as with any other industry, it has its pros and cons and several risks. Due to the newness and rapid growth of the metaverse industry, investors should remain cautious and diversify their portfolios to reduce volatility.
On the other hand, investors with a high-risk tolerance can benefit from the new industry that is expected to multiply in the next few years as the new space and vision of a virtual world for socializing, shopping, gaming, work, and entertainment evolves.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
FAQs about the metaverse
What is the metaverse?
Metaverse is a virtual reality world in 3D where users can interact with each other as avatars, where separate virtual worlds can be accessed online via an online interface wearing a VR headset. Similar to how we can access websites, we can access a virtual world via a 3D interface, pioneered by the online gaming industry.
How to invest in the metaverse?
To profit early, metaverse investing can pose great opportunities. Three common ways to invest are: metaverse company stocks, metaverse cryptocurrencies, metaverse NFTs. Contrary to the real world, anyone no matter the country can invest in the metaverse buying metaverse cryptocurrencies or metaverse NFTs.
What are different metaverse use cases?
The first successful metaverse use case is in the gaming industry, with games and metaverse platforms like Minecraft, Fortnite, Roblox, or Decentraland. However, other possible metaverse use cases include: socializing, business and work, shopping, or manufacturing.
What are the top 5 metaverse stocks to invest in?
Companies that support the future development of the metaverse concept are a good option if you wish to invest in metaverse stocks. We consider the top five metaverse stocks to buy: Meta Platforms Inc. (FB), formerly known as Facebook, technology company Nvidia (NVDA), metaverse gaming platform Roblox (RBLX), software company Unity Software Inc. (U), or content delivery network provider Cloudflare Inc. (NET).
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