Market Trends

Metaverse

According to Bloomberg, the metaverse market cap will grow from $500B to $800B in just the next 2 years. Anyone can see the growth trajectory and identify that this driver of growth is the best opportunity to capitalize on.

The metaverse has been around since the 1980’s but in 2021 everyone began to acknowledge that the Metaverse is coming. 2022 will be the year that we will start to see companies seriously think about what this space means to them and how they can prepare for it.

NFT’s are digital assets representing art, collectibles, and in-game items. NFTs are traded online, often with cryptocurrency, and are encoded within smart contracts on the blockchain. Public interest in them has exploded since 2021, when their market saw record sales.

Yet, little is known about their structure and evolution. Out of 6.1 million NFT trades between June of ’17 and April of ’21, 4.7 million NFTs were conducted on Ethereum and WAX blockchains. The market data suggests that NFT categories have cult-like followings. Traders focus on a specific niche or two, and don’t veer too much outside of that.

Early-stages of utilization come into play with virtual land and buildings. It’s becoming more common for people, companies, and even REITs to buy land in virtual worlds like Decentraland and rent out the virtual property. This sounds ludicrous, yet it’s becoming more normal every day.

Furthermore, utilities for building virtual properties are growing. Examples are steel plants that are required to develop high-end apartments and even structural designers to construct properties. Marketplaces that essentially act like “Zillow for the metaverse” are popping up all over as well. Examples are rentible.io and everdome.io.

The shorter answer to what is coming in the next wave of the NFT and metaverse worlds are utility-driven products that are largely focused on property, buildings, and the like. The question becomes how far out this “tomorrow” of the NFT world is. While emotions sell today and utilities will sell tomorrow, the gray area between is where we are at today. However, for a market cap of $1B in 3 years, it’s strongly recommended that it would be better to be an early-adopter on the utility side of the equation and see dramatic returns than to see good returns from creatively-driven NFTs unless used to fund tomorrow’s development.

The reason that the crypto comes before the metaverse itself is that the successful metaverse worlds already developed have an initial coin offering (ICO) to build the hype and funding they need for the metaverse itself. Examples can be seen through Sandbox, Axie, and Enjin.

The exception to the general rule stated above is when the virtual worlds were developed by developers early on. While Decentraland and Sandbox were developed before 2020, they were developed by developers before the metaverse came into view for the general population.

This is only the smart order in which to do things if you’re able to build everything yourself without the need for developers and engineers.

You’re able to raise funds and create cash flow without having to build a complex, virtual reality metaverse. While that’s the goal, it makes more sense to have ample funding through a staged-ICO. This means that you build engagement with the VIP Creator pass holders, then let another wave of early-stage buyers on, then move on toward a public ICO.