invest in the Metaverse

invest in the Metaverse

those who have read Ernest Cline’s Ready Player One or seen the 2018 adaptation by the same name already (kind of) know what the term means. set in 2045, Cline’s story features a video game called OASIS that has established itself as a virtual utopia. 

it mimics every aspect of the real world and offers people an escape. OASIS is the metaverse whose promise VR developers around the world are trying to replicate.

so what is the Metaverse?

plainly put, the metaverse is a virtual space where individuals can interact with each other as they would in real life. the term, coined by sci-fi writer Neal Stephenson in his novel Snow Crash, has become the latest buzzword among entrepreneurs and investors. such a virtual world can be achieved only on the successful implementation of virtual and augmented reality technology in an online space that can operate at scale.

hence, this new paradigm brings along plenty of opportunities to innovate, leading to the creation of an entirely new sector and investment class.

what’s happening in this verse? 

it is still the early days, but firms focused on building the metaverse are seeing tremendous interest.

take Roblox, for example, which is shaping up to be a leader in the metaverse gaming space. it recently went public on Nasdaq through a direct listing and currently has a market cap of $42.3 billion. more than the market cap of legacy gaming firms like Electronic Sports (EA Sports), which stands at $38 billion.

in April, Epic Games, the creator of Fortnite, announced a $1 billion round of funding to help the company realize its vision for the metaverse.

what’s more?

the rise of crypto-asset use cases like non-fungible tokens (NFTs) is further helping to create and grow virtual economies in this metaverse.

hence, it comes as no surprise that asset management companies (AMCs) want to have financial products that let investors ride this trend. Bloomberg Intelligence believes the market opportunity for the Metaverse can reach $800 billion by 2024.

US-based investment firm Roundhill Investments has already launched an exchange-traded fund (ETF) which invests in stocks of companies that are building the metaverse or are geared to do so or benefit from this space.

called the Roundhill Ball Metaverse, the ETF was launched earlier this year in June and currently has $106 million in assets under management (AUM). the top five holdings of the ETF include Nvidia, Microsoft, Roblox, Facebook, and Unity Software.