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Despite the metaverse’s futuristic nature, many still doubt its long-term investment success.
This new 3D virtual world has quickly taken the tech world by storm with digital assets such as non-fungible tokens (NFTs) that can be bought and sold across its multiple platforms.
Big companies are pouring money into Metaverse. And many say that early adopters who invest now will eventually reap big returns. While Metaverse could very well turn into something big, here are three reasons that have some investors skeptical.
It is not a new concept. For decades, people have been dreaming of such a virtual world. A world that allows its users to live without limits, buy things, connect with old and new friends, get married, rent real estate or travel to places far from comfort. But up to this point, none of these worlds have been established. And they do not see the acceptance of ordinary people in the long term. Finally, as people get caught up in the demands of the real world, interest in it also disappears.
Why should the metaverse be different? Some argue that technological advances over the past decade have improved the way people experience virtual reality. Things like augmented reality (AR) headsets definitely make it feel as if you are actually living and experiencing this alternate world. However, I don’t think new technology alone can make this mainstream. We all have so many demands in the real world that we have little time to live an online life.
Despite increasing corporate investments in the metaverse, public interest appears to be waning. Polls show that 68% of respondents are not very interested in the growth of Metaverse, and 78% consider it to be just a hype. Google searches for the term metaverse are also a fifth of what they were during peak traffic in 2021. There are also only about 50,000 active users of Web 3.0, the decentralized Internet that powers the metaverse, so the amount of money being poured into it is very small.
One of the great aspects of investing is being able to put your money into companies that align with your environmental and social ethics or values. The metaverse is very different from what many believe. Bitcoin mining, blockchain technologies and the virtual world require a lot of energy to work. That is not great for the environment. The Bitcoin Energy Consumption Index estimates that one Bitcoin transaction consumes as much energy as an American household in approximately 75 days. Many companies involved in these technologies are working towards net zero carbon emissions. But right now, the metaverse is completely unstable.
There are also social concerns. Metaverse is valued at $47 billion today. And if adoption continues as advocates hope, it could reach $800 billion by 2024. That’s a lot of money to invest in technology. which can improve or improve our physical world today. There are certainly many problems in our country that $47 billion can help solve.
Personally, I’m not a big fan of gaming or virtual reality. thus advocating for wider adoption that includes more screen time and less interaction with the real world. It must be accepted that these values do not belong to everyone. But this is one of the reasons why they still don’t invest much.
The third negative reason: Metaverse may not be worth risking at all
Investing in the metaverse is only as valuable as the demand for the technologies involved. The NFT or piece of virtual earth you bought may be worth something today, while the hype surrounding the metaverse is very real. But if interest fades, you can be left high and dry with nothing to show for it.
There are countless companies like real estate investment trusts (REITs) that play an important role in how our real world works and are much less risky than the metaverse. While it may not be embraced by many as much as the growth that Metaverse may offer in the future, so they won’t be risking all their money on a highly speculative play.
But can Metaverse be considered a good investment opportunity? Metaverse is consistently ranked as one of the best long-term cryptocurrency investments. Because it offers a unique way for people to socialize and play.
In addition, ideas based on the metaverse have also been introduced by non-digital currency companies. One of the leading companies in this field is Roblox. which provides a platform for children and teenagers to interact and play joint games
Roblox Corporation became the first known metaverse company to go public in March 2021, with shares up more than 133% in 9 months. Much of this growth can be attributed to the exciting way Roblox has embraced the concepts of the metaverse
Best Metaverse Companies to Invest In Along with crypto-based projects, Metaverse may also be a good investment because of exposure to other areas of the cryptocurrency market. These areas include blockchain technology, decentralized finance (DeFi) and NFTs, which have shown significant growth in recent years.
That said, investing in the Metaverse is still inherently unpredictable. All of these platforms are relatively new in the grand scheme of things, so it’s challenging to estimate price changes over the long term, something that is very achievable with stocks. However, successful projects can have much higher returns.
By understanding more about the metaverse and investing in it, it will be easier to see how virtual environments scale, which companies have invested, and what the metaverse intends to be. This not only gives investors confidence, but also helps them decide where and how to invest. While Metaverse can be a good investment option, it definitely carries great risks.
But what do you think? Do you think Metaverse has a bright future ahead? Share your views with us in the comments section.
