Before reading this: I am not a financial advisor. Please do your own due diligence before making an investment decision based on my article.
As the metaverse continues to shock and awe individuals worldwide, it has yet to reach a level of mass adoption. Quite frankly, a situation like this is to be expected. Institutional support is a critical component in the public adoption of disruptive technologies; take a look at Bitcoin during the pandemic. Companies like Tesla and Square saw the utility in Bitcoin as a store of value. When these billion-dollar companies bought Bitcoin for the first time, skeptics began to change their minds about the cryptocurrency. I mean, it must be a valuable investment if businesses are pouring millions of dollars into the currency, right?
But this article isn't about Bitcoin and Elon Musk (sorry to disappoint); it's about the institutional adoption of the metaverse and the investment decisions that can come with the metaverse.
Thankfully, market leaders like NIKE have begun pivoting their business model to suit the succession of Web 2.0. By recently acquiring RTFKT, a leader in the NFT-space that specializes in integrating virtual sneakers and other accessories into the real world, NIKE is showing they aren't afraid of our digital future. If a company with millions of shareholders isn't scared of investing in the growing industry, why shouldn't we?
So what's so special about the metaverse? Well, for one, as previously mentioned, it's the succession of Web 2.0. Instead of having a centralized entity owning and controlling the data related to user-generated content (UGC) and the social web, Web 3.0 will be a decentralized version of the virtual world. As stated by Roundhill Investments, it will be "interoperable, persistent, synchronous, [and] open to unlimited participants with a fully functioning economy."
If the evolution of Web 2.0 doesn't phase you, then how about the projected increase to $800 billion by 2024 for the global metaverse industry? With big names like NIKE, Nvidia, Roblox, Epic Games, and Meta hopping on board the metaverse trend, it's not hard to foresee a future led by these initiatives.
The lack of mass adoption isn't only a question of how many institutions will support the metaverse initiative, but it is also a question of when cryptocurrencies will reach the same level of investment and interest as in the global stock markets. A situation like this occurs because cryptocurrencies are still relatively new. Regulating a new market is a tedious process, and some individuals, especially the older generations, do not trust crypto yet because of this reason.
In addition, cryptocurrencies don't have tax-sheltered accounts explicitly created for crypto investments. Here in Canada, crypto isn't legally seen as an investment or legal tender; instead, it is classified as a commodity. Therefore, as a Canadian, we cannot directly hold crypto in our TFSA or RRSP accounts (our two most popular tax-sheltered savings account).
The keyword is that we cannot directly hold crypto in tax-sheltered savings accounts. Luckily for you and me, ETFs tracking metaverse indexes have recently emerged to fulfill our needs. This allows us to indirectly hold crypto in a tax-sheltered account via an ETF.
Now that you can see one of the main advantages of purchasing metaverse ETF stock, let's take a look at Roundhill Ball Metaverse ETF ("META ETF"). Launched in the summer, it is at the forefront of metaverse ETFs. META ETF has experienced tremendous success over a short period and is bound to continue to grow.
Here are some pertinent points of information that can help you further understand META ETF:
Tracks the performance of the Ball Metaverse Index, the first index of its kind
Carries a diversified basket of companies that may become key players in the metaverse initiative
Partners with thought-leaders in various sectors of the industry
Thriving out of the gate with 150 million inflows pre-Facebook's rebranding announcement
By late November, they had over 800 million in inflows
This is rare for ETFs since, upon launch, they generally tend to have low volume and inflows
No outbound sales force as they are targeting retail investors over institutions
Also, research is disseminated through social media, their newsletter, and their website to help target retail investors
As you can see, META ETF is disrupting the industry. I would highly recommend you check out their investor presentation here: https://www.roundhillinvestments.com/assets/pdfs/META_Deck.pdf