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The Rise of the Metaverse

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Avatar for wholelottajuju
Written by   10
11 months ago

With Zuckerberg recently announcing Facebook's rebrand to the conglomerate Meta, and his subsequent keynote explaining the brand's repositioning strategy, many are left wondering why a trillion-dollar company with billions in monthly active users would bank on the future of the metaverse as its core product.

This article will help you understand the booming metaverse market and why I am particularly bullish as a retail investor.

What is the metaverse?

As Zuckerberg stated in Gary Vee's podcast episode:

The metaverse to me, today, feels like the next frontier in social connection.

The CEO couldn't have explained it any better. The metaverse is the evolution of the internet; many deem it the rise of Web 3. In essence, it is a disruptive immersive medium that interconnects various aspects of human socialization and technology.

In plain English, the metaverse is the evolution of socialization on the web. For example, instead of posting an item for sale on Facebook Marketplace, individuals may be able to sell the item in a photorealistic virtual world with their own personalized avatar.

This is just one example. It is imperative to understand the metaverse isn't purely the integration of VR and/or AR with social media. The metaverse can simply be an app connecting you with millions of other users on your phone. Take Roblox, a successful company that has slowly transitioned to a metaverse model. Users feel like they're immersed in the Roblox world with the thousands of apps built on the platform, even if they're only connected through their phones.

But wait... There are other companies in the metaverse sphere?!

Yes, there is! In fact, there are dozens of blue-chip companies working on metaverse projects. Heck, even companies like Nike have begun to take leadership by creating positions specifically for the metaverse. Chief Metaverse Officers are speculated to be an essential part of the C-suite in the next five to ten years.

Zuckerberg's announcement really just put a spotlight on the metaverse industry for ordinary people like you and me.

Notably, some of the most influential companies leading the metaverse initiative are Nvidia, Unity, Roblox, Epic Games, and Meta. These companies all have different versions and applications for the metaverse. For example, Nvidia's version of the metaverse called the "Omniverse" is tailored towards developers and engineers. On the other hand, Unity is focused on improving modelling, testing, and training complex systems through AI in a simulated world.

Although these companies are well-known, the real leaders of this disruptive technology emerge from the crypto-sphere. Projects like Decentraland, The Sandbox, and Axie Infinity have amassed billions in market cap.

I could go on and on about what each technology does, but for the sake of time, we'll save that for another day.

Should I invest in the industry?

If you believe in Bloomberg Intelligence research, the global metaverse market is projected to increase to a whopping $800 billion by 2024. In comparison, the market size was sitting at $500 million last year. This alone could persuade you to invest in any of these companies.

If that isn't enough for you, just think about the tangible shift in Fortune 500 companies. They aren't just slowly shifting their entire business model on a bet.

On top of all this, Zuckerberg's announcement sparked interest in the industry. The net market cap of metaverse tokens increased by 13.40% after this event. These crypto projects have grown a staggering 37,000% this year alone. Although growth like this can be linked to short-term hype, as we witnessed in the GameStop saga, the growing number of users will only strengthen the network effects of the world's current metaverse platforms.

I am not a financial advisor. Please do your own due diligence before making a decision based on my article, as I am not responsible or liable for your investment decisions.

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