How to invest in the Metaverse – a beginner’s guide
The Metaverse is a progressive trend, which, following Meta (formerly Facebook), was joined by many IT and online entertainment market leaders. Nvidia, Microsoft, Unity, Take-Two Interactive are all now part of the Metaverse. Our question, however, is how to make good money on this global trend.
Investing in the Metaverse implies investing in the shares of large brands, purchasing NFTs and also creation of one’s own non-fungible tokens, purchasing or leasing land on the virtual platforms. There are many options and all of them look promising. Therefore, it is not easy to understand the opportunity each option offers.
In this article you will learn how to invest in the Metaverse with the highest profit. TU experts will outline the features, pros and cons of each of the investment options using the reviews of the top exchange analysts as a background.
Start investing in metaverse coins right now with Binance!Should I invest in the Metaverse?
When thinking about how to earn on the Metaverse, it is logical to start with evaluation of the potential of this concept. In the beginning, it was all rather unclear: when Mark Zuckerberg renamed Facebook into Meta in 2021, the company’s stock lost 30% of its market value. However, we remember well how successful the decisions of Zuckerberg to buy Instagram and WhatsApp were. Mark has never made a mistake in the plans for development of his company. And now, Meta shares have already grown by 18% in Q1 2023, while the company’s budget for development is USD 24 billion.
The other example is the virtual land in the Metaverse. A year ago, in spring of 2021, one land plot on the largest platforms, i.e. Decentraland and The Sandbox, cost USD 1,000. Now, the price for these plots starts from USD 13,000. Olivier Acuna, co-founder of Adlunam (the first and largest crowdfunding platform with integrated NFTs) has no doubt that investing in virtual land will become even more profitable in 2023 than buying physical land.
Luis Carranza, CEO and founder of Fayre (a top NFT marketplace), bought USD 150,000 worth of land in Decentraland and predicts that Meta Platforms will be worth billions by the end of the year. Moreover, Carranza bought the land from an anonymous artist who sold his NFT paintings for more than USD 69 million through the Christie's auction house, which is also part of the Metaverse.
In reality, the forecasts of Grayscale, the largest investment company in the world, would be enough. According to the expert reports, the Metaverse will cross the $1 billion annual yield threshold in the coming years from advertising, digital events, e-commerce, cryptocurrency and hardware trading. At the moment, the Metaverse is probably the most promising area for investing.
Option 1 – Buy the Metaverse stock
Risk level |
4.4 |
Complexity |
3.5 |
Profit potential |
6.1 |
The Metaverse stock are the shares of the company operating in the field of IT and virtual entertainment. Each of these companies creates their own Metaverses and together they form the provisional single Metaverse, as a conglomerate of platforms. Social networks, online games, messaging apps – these are all Metaverses, the developers of which have shares. These shares can be bought, and you can make money when their price grows.
The examples of the companies that are creating the Metaverse include Meta Platforms, Nvidia, Match Group, Roblox, Autodesk, Unity Software, Microsoft Corporation. In reality, there are hundreds of them, but at the moment you can buy the Metaverse shares of only a few dozen developers with the greatest profit.
👍 Pros of buying the Metaverse stock:
• Experts predict stable growth of the stock prices of top companies;
•You can earn a profit from the shares by selling them when the price grows;
•Short-term price decline is an opportunity to make money on short sales;
•Shares of large Metaverse companies bring dividends;
•a well-diversified portfolio provides a stable income.
👎 Cons of buying the Metaverse stock:
• even stable companies have periods when the quotes drop;
•in case of a bad forecast, there is a risk of losing a significant part of the invested funds;
•investing in stock carries the standard financial risks.
Option 2 – Buy the Metaverse ETF
Risk level |
3.6 |
Complexity |
3.5 |
Profit potential |
5.2 |
You can earn money from the Metaverse stock by buying securities of specific companies. Or you can buy ETFs (exchange-traded funds). These are ready-made investment portfolios, which contain several exchange tickers based on a common feature, for example belonging to one sector.
Investing in ETFs is more profitable in terms of risk diversification, but you cannot change the composition of the fund. Roundhill Ball Metaverse ETF is the most popular and universal Metaverse ETF. Other examples include Global X FinTech ETF, ProShares UltraPro QQQ, SPDR S & P Software & Services ETF, Fidelity MSCI Information Technology Index ETF.
👍 Pros of investing in the Metaverse ETF:
•high level of risk diversification;
•the funds are formed by experienced professionals;
•favorable forecast for the segment;
•does not require a lot of funds;
•there is no need for in-depth market analysis.
👎 Cons of investing in the Metaverse ETF:
•an investor does not control the composition of the fund;
•an additional fee is charged for the fund’s management;
•growth potential is lower than when investing in stocks.
Option 3 – Investing in Metaverse cryptocurrencies
Risk level |
8.1 |
Complexity |
2.9 |
Profit potential |
9.5 |
In reality, all cryptocurrencies are the Metaverse cryptocurrencies. Many platforms use certain altcoins for internal transactions. For example, you can buy land in Decentraland only for MANA. Due to this, altcoin's quotes grew quite well at the start of Meta Platforms.
Unlike stocks and ETFs, Metaverse cryptocurrencies are much more volatile, their quotes change faster and they are less predictable. On the one hand, this is an increased risk, while on the other hand, the profit potential is incommensurable with any other financial instrument, especially if you trade Metaverse cryptocurrencies with leverage.
👍 Pros of investing in Metaverse cryptocurrencies:
•small initial capital (USD 100 is enough);
•the majority of brokers offer demo accounts for testing strategies;
•it is one of the easiest instruments to learn;
•the highest profit potential (especially with leverage);
•you can make good money in any way.
👎 Cons of investing in Metaverse cryptocurrencies:
•one of the highest risk levels;
•the fees decrease only with the growth of trading volumes;
•too many factors have an impact on quotes.
Option 4 – Investing in the Metaverse Index
Risk level |
5.1 |
Complexity |
3.9 |
Profit potential |
7.5 |
Stock index is an indicator of the state of the securities market, calculated on the basis of a basket of the most liquid stocks. As a rule, the index includes the securities of the top players in the segment. In the case of Metaverse stocks, we are talking about the Metaverse Index from Index Coop.
This index is a set of tokens designed to reflect the trends of transition of entertainment, sports and business to the virtual environment. In other words, the growth of the index is determined by how intensively the market leaders virtualize their products and services. The transition to the Metaverse is a global trend and, therefore, experts predict progressive growth for the Metaverse Index. Also, given that it is an entire set of assets, the risks for investors are reduced.
👍 Pros of investing in the Metaverse Index:
•favorable forecast for segment development;
•lower risks due to working with a selection of assets;
•an investor does not need to build a portfolio on his own;
•this is the most passive investing option;
•the index is available at all large exchanges.
👎 Cons of investing in the Metaverse Index:
•the highest profit potential is in the long-term;
•a high initial capital is required;
•an investor cannot change or influence the composition of the index.
Option 5 – Purchase/sale of the Metaverse NFTs
Risk level |
4.1 |
Complexity |
3.8 |
Profit potential |
6.9 |
NFTs are non-fungible tokens, which cannot be replaced with an equivalent. An NFT can be an object of art (a virtual painting), a currency (for example, a voucher for a session with a psychologist in the Metaverse) or a ticket (for a concert or to a club). Here is a specific example: in the Arcona world, NFT token ERC-721 is a confirmation of the ownership of the land plot in an augmented reality landscape with reference to a physical location.
Why is it beneficial to invest in the Metaverse NFTs? Because a non-fungible token can be bought and sold. Let's say an architect creates a 3D model of a building and links an NFT to it on a smart contract. Developers of online games, augmented reality applications, owners of virtual land who want to make their locations unique and draw attention to them may be interested in this token. And the locations themselves can be traded on OpenSea.
👍 Pros of investing in the Metaverse NFTs:
•token’s uniqueness determines its initial price;
•token creator/owner can influence the price of the asset;
•NFTs are sold and resold on many platforms;
•As a rule, the price of the NFT grows over time;
•There are no special conditions for buying and selling NFTs.
👎 Cons of investing in the Metaverse NFTs:
•An NFT is a way to indicate ownership, not a class of assets.
•An NFT often can’t be purchased for fiat money (they are mostly bought for Ethereum).
Option 6 – Creating own NFTs
Risk level |
4.6 |
Complexity |
5.9 |
Profit potential |
4.9 |
Technically, NFTs are not created. Using the blockchain technology, tokens are “minted”. Frequently, it is done on the same platforms where they are sold. The examples of such platforms include WazirX, Fayre, NFTically, Foundation, MakersPlace and Mineable. BEP-721 and BEP-1155 blockchain protocols are used to “mint” NFTs. The algorithm may differ depending on the platform, but essentially it is the same – a user needs to upload the file he created to the platform and it will be automatically converted into an NFT. In order to complete the process of creation of a token, you need to pay a fee to the platform. After that, the token owner can do whatever he likes – to sell, lease out, use it (for example to build a castle on his virtual land, the 3D model of which he “minted” into an NFT).
👍 Pros of creating own NFTs:
•The process of “minting” a token is technically simple;
•You can create a token for any digital object;
•The creator can artificially influence the value of the token;
•Valuable tokens grow in price over time;
•There are many platforms for trading NFTs.
👎 Cons of creating own NFTs:
•Not all NFTs have real value;
•It is difficult to move a token from one blockchain to another;
•The price of an NFT may drop due to many factors.
Option 7 – Buying the Metaverse real estate
Risk level |
5.6 |
Complexity |
2.5 |
Profit potential |
7.0 |
Meta Platforms regulates five official platforms trading virtual land and real estate. These are Decentraland, The Sandbox, Somnium, Cryptovoxels, and Upland. There are also other projects, but they are not controlled by Meta, and therefore you can work with them only at your own risk. On each of such platforms, users can buy the Metaverse land and virtual real estate. Real estate is a real digitized building or an original project created from scratch by a designer.
What is it for? Large brands organize exhibitions, shows, presentations and concerts, hold corporate events and communicate with clients on their virtual land. All of this happens inside the buildings, which is why Gucci, for example, may be interested in a stylish gallery, and Nike may buy a futuristic office. Entertainment projects often buy such real estate. Also, sometimes, owners of zones who want their land to look original and have the money for it show interest in such projects.
👍 Pros of buying the Metaverse real estate:
•An original 3D model can always be sold;
•Metaverse real estate is not tied to a location;
•There are many ways to raise the value of the real estate;
•Virtual real estate can be leased out;
•Experts predict that the sector will grow.
👎 Cons of buying the Metaverse real estate:
•Only truly unique projects have a good chance of growing in price;
•The price of virtual real estate may drop for many reasons;
•Purchase/sale of the Metaverse real estate does not provide a stable income yet.
How risky is it to invest in the Metaverse?
The price of the Metaverse land is rising, as is the virtual real estate. However, essentially these are venture investments that could bring high profits, but also carry high risks, because too many factors can influence the Metaverse popularity – from another statement of Mark Zuckerberg to financial agitation in the cryptocurrency market. You cannot predict all of these regardless of your investment experience.
The same applies to NFTs. The situation is slightly more stable with the shares traded by the funds at the exchange and indices, because they are real, and not virtual assets. By those we mean the securities of companies that have been in the market for a long time. They existed before the Metaverse and will continue to exist further, if the trend suddenly dies down. These are the titans with millions in income; it is profitable to invest in them in general, even without the Metaverse concept involved. If you want to maximize the passive nature of your income, it is better to work not with the shares, but with ready-made portfolios.
Nonetheless, the stock market (of the Metaverse and beyond) carries typical financial risks. Only experienced investors capable of performing fundamental and technical analysis at a high level profit here. Of course, a novice investor can also get a piece of the “winning pie”, but it is certainly not worth risking high amounts at the beginning, and it is important to follow the rules of money management.
Overall, it is fair to say that investing in the Metaverse is a high-risk affair, although the profit can be just as high, and it is quite easy to reduce the risks in certain areas.
Best Platforms to Invest in the Metaverse
The issue of buying land in the Metaverse remains disputable for many investors. Meanwhile, trading stock and ETFs is currently one of the most popular areas of investing in the Metaverse, along with cryptocurrency and NFTs. However, not all exchanges offer truly good conditions on these instruments. The three important factors that distinguish a client-oriented platform are a good choice of assets, low fees and convenient withdrawal. Based on the comprehensive segment analysis and user reviews, Traders Union experts determined the top two exchanges that provide for comfortable trading.
Interactive Brokers – Best Platform to Trade Stock and ETFs
The broker provides access to 150 stock markets and works with 25 fiat currencies. Interactive Brokers offers the lowest fees for trading stocks – from USD 0.2 without spreads or additional fees. Moreover, the broker offers nearly 150 ETFs, for which the trading fee is not charged. You can use your browser, desktop or mobile app to trade. There is rebate, a program to increase the yield on shares and a number of additional tools that make trading stock and ETFs even easier and more comfortable.
Binance – Best Broker to Trade NFT and cryptocurrency
The platform provides access to trading over 600 cryptocurrencies (a built-in wallet is offered for holding them). The fees are from 0.10% per transaction. The broker has a native token, offering additional bonuses for trading it (for example, fee reduction). The NFT minting and trading service is built into the platform; there are specific tokens, collections and mystery boxes. The broker regularly holds premium events with a chance to win exclusive non-fungible tokens. You can trade from a browser to a mobile gadget. The exchange does not charge a deposit fee, while the withdrawal fee is average in the segment (depends on the asset).
Conclusion
Investing in the Metaverse is real and can be profitable, if you understand how this concept works and what financial mechanisms it uses. The simplest and most stable option is the Metaverse stock. Virtual land, real estate and NFTs are investments that carry high risks. However, as we know, any risk can be properly diversified, while the profit potential here is unlimited.
Trading ETFs on the Metaverse stock and index allows you to have a diversified securities portfolio, which unlike specific shares is less risky, although it also offers a lower profitability. Therefore, the question about how to invest in the Metaverse has a number of answers, and this is a good thing, because every investor can choose an instrument that fits the best with his strategies, expectations and risk tolerance.
FAQs
How can I invest in the Metaverse?
Investing in the Metaverse involves buying shares of large IT companies, virtual land and real estate, minting and selling NFTs, trading cryptocurrency. Today, everybody can start earning from one or another Metaverse segment.
What are the prospects of investing in the Metaverse?
The price of the Meta Platforms stock is increasing with the company attracting tens of millions of dollars in investment. Virtual land is becoming more expensive and a larger number of regulated platforms for selling NFTs are appearing. This means that the concept is developing and it is a stable trend.
What is the easiest way to make money on the Metaverse?
These are venture investments in any case and they carry high risks. The easiest thing is to diversify the risks, working with the Metaverse Index and ETFs. Selling or leasing virtual land, on the other hand, requires considerate approach and in-depth research of the issue.
On what platforms can I invest in the Metaverse?
You can trade the Metaverse cryptocurrency, stock, funds and index through reputable brokers, such as Interactive Brokers and Binance. The best places to buy land are Decentraland and The Sandbox. The top NFT platforms are Fayre, NFTically, Foundation, MakersPlace, and Mineable.
Team that worked on the article
Andrey Mastykin is an experienced author, editor, and content strategist who has been with Traders Union since 2020. As an editor, he is meticulous about fact-checking and ensuring the accuracy of all information published on the Traders Union platform. Andrey focuses on educating readers about the potential rewards and risks involved in trading financial markets.
He firmly believes that passive investing is a more suitable strategy for most individuals. Andrey's conservative approach and focus on risk management resonate with many readers, making him a trusted source of financial information.
Olga Shendetskaya has been a part of the Traders Union team as an author, editor and proofreader since 2017. Since 2020, Shendetskaya has been the assistant chief editor of the website of Traders Union, an international association of traders. She has over 10 years of experience of working with economic and financial texts. In the period of 2017-2020, Olga has worked as a journalist and editor of laftNews news agency, economic and financial news sections. At the moment, Olga is a part of the team of top industry experts involved in creation of educational articles in finance and investment, overseeing their writing and publication on the Traders Union website.
Olga has extensive experience in writing and editing articles about the specifics of working in the Forex market, cryptocurrency market, stock exchanges and also in the segment of financial investment in general. This level of expertise allows Olga to create unique and comprehensive articles, describing complex investment mechanisms in a simple and accessible way for traders of any level.
Olga’s motto: Do well and you’ll be well!