What is the Metaverse, and How Can You Invest?

What is the Metaverse?

You’ve likely heard of the metaverse. It’s been getting a lot of attention since Mark Zuckerberg announced he was rebranding Facebook to become Meta Platforms in October 2021. However, the metaverse has a much longer and larger history than Facebook. Games like Second Life and The Sims have been around for decades giving people a taste of what it’s like to live a digital life. You could argue the hours people spend scrolling through the digital worlds of Instagram and TikTok is another way people engage with the metaverse. However, these examples are just the tip of the iceberg.

The metaverse of the future is a virtual world that will be more than a game, it’s meant to parallel real life. The metaverse is the merging of physical reality with digital reality – a truly immersive environment that brings together people, places, and things. The metaverse is the next iteration of the internet.

In these new digital worlds, there are new marketplaces where you can purchase land, build your dream home, and buy digital furniture or home décor. You can shop for designer clothes and shoes for your online avatar. You can buy assets in the form of non-fungible tokens (NFTs -- one-of-a-kind digital items like music, art, or videos that can be securely traded on the blockchain). In 2021, the NFT market surpassed $40 billion dollars¹ with a digital art piece called The Merge, selling for $91.8 million².

Opportunities in the Metaverse

The metaverse also provides new opportunities to advertise, whether it’s in a gaming environment, on a social network, or even at a live metaverse event. Companies can use product placement or virtual billboards in the metaverse to advertise real-world products or services. Avatars of your favourite musician or athlete can be seen wearing the newest digital fashion or sporting equipment from big brands like Gucci and Nike. There are already examples of musicians like Ariana Grande and Travis Scott hosting virtual concerts that attract millions of fans from across the globe.

What’s exciting about the metaverse is the near unlimited number of potential opportunities and applications. Instead of learning about the seven wonders of the world in a textbook, students will be able to go on an immersive field trip to the Great Wall of China or the Colosseum. In medicine, residents can use augmented reality to practice intricate surgeries or procedures.  In business, meetings will take place in the 3-D metaverse with avatars that can make eye contact and mimic lifelike gestures. While the metaverse is still a concept that is growing and maturing, it’s clear there are significant investment opportunities.

Why Consider Investing in the Metaverse?

Many companies are embracing the metaverse and have already started to invest or are looking for opportunities to get involved. For example, companies are already working on developing software and hardware that will power new developments and enable more users to become a part of these digital worlds. Companies are investing in new online gaming, social networking, and live digital events that will take place in the metaverse. In 2021, the metaverse market size was valued at USD 209.77 billion³. By 2027, the metaverse market size is expected to reach USD 716.5 billion. The metaverse is positioned to be the next big trend and companies don’t want to miss out on the opportunity to participate and profit. 

The Metaverse as an Investment Opportunity

The metaverse has long-term implications that will fundamentally shift the way people work and play. In addition, the metaverse creates a path toward a new digital economy as users can purchase and sell digital assets using cryptocurrencies. 

CI Global Asset Management recently introduced the CI Galaxy Metaverse ETF (TSX: CMVX) which provides low-cost and targeted exposure to companies that are engaged in the development of digital ecosystems including companies involved in the interaction, enablement, and connectivity of the metaverse.

¹ Chainalysis. The 2021 NFT Market Report, 2022.

² Barrons. PAK’s NFT Artwork ‘The Merge’ Sells for $91.8 million, 2021.

³ Brand Essence Research. Metaverse Market Size, Share, Companies & Trends Analysis Report, 2022.

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