The case of virtual real estate investments – Metaverse Investment
We are now encountering uncharted financial territory as the metaverse draws closer to us and our lives become intertwined with it. If you generally tingle with the entrepreneurial spirit, you might be curious to learn about investment options regarding the Metaverse.
Money is pouring in the Metaverse as investors are in a hurry to buy virtual real estate. The very first virtual real estate trust has already been set up, called MetaSpace, which aims to create a way for people to hold shares in profitable virtual real estate projects.
But let’s not run so fast. What is going on exactly? Meta is the new name for Facebook, which was announced a few months ago and we have barely been able to comprehend the new future awaiting us: the Metaverse. So, to better understand the phenomenon, we need to imagine the Metaverse as a virtual world made by tech insiders, where plots of land also exist and can be bought for millions.
As we have already discussed, even the fashion industry could be reshaped by the many opportunities the Metaverse offers, and one can only hope this could lessen the environmental impact of businesses in the sector.
Andrew Kiguel, the CEO of Toronto-based Tokens.com, which invests in metaverse real estate and non-fungible token-related digital assets, told CNBC that “The metaverse is the next iteration of social media”. Over the last few months, digital real estate prices have skyrocketed. “You can go to a carnival, you can go to a music concert, you can go to a museum,” said Kiguel.
Investing in Metaverse
Investors are purchasing high-value real estate in the Metaverse, building high-value virtual structures, and renting them out for profit. Metaverse platforms allow you to buy lots and rent them back to users and companies, depending on where the properties are located.
A recent report by Grayscale estimates the digital world may grow into a $1 trillion business shortly. The demand for properties in digital realms is soaring, guided by the same rule as in the physical world: location, location, location. Just like in the real world, property investments are first and foremost dependent on where they are. In the Metaverse investment, you will find those areas where people gather together for events and those are the places you would want to put your money in.
For example, Justin Bieber performed at a live concert, but it wasn’t in a stadium or an arena. Rather, this concert was held in the Metaverse, just like recent performances by the Weeknd, Ariana Grande, and Travis Scott. At the end of last year, Meta announced a slate of big-name virtual reality concerts to take place entirely in its Horizon Venues Metaverse last month. The lineup included rapper Young Thug on December 26, DJ David Guetta on December 31, and EDM duo The Chainsmokers for a New Years’ Eve concert to ring in 2022. However, not many people noticed — and those who didn’t seem to really bother.
Therefore, we need to keep in mind that real estate investing in the metaverse is highly speculative, and no one knows if this is the next big thing or the next big bubble. Of course, some technologists believe the metaverse will develop into an entirely functioning economy and will provide a whole experience that will be as natural as email and social networking today. Others caution against the hype and say that we need to wait and see until the storm calms down to be able to make rational decisions.
Even if the investments are not as substantial as in the real world, one should only invest as much as they are also willing to lose in case of a bursting bubble. There is no other choice, but to believe the platform will exist far enough into the future that you can cash out your investment and make a profit.