Understanding the Metaverse Profit Potential

I can remember childhood Christmases with an almost tangible vividness.  

I would set out milk and cookies for Santa Claus, too excited to sleep, with the knowledge that in the morning there’d be a slew of presents waiting to be opened. 

For many children there’s no more exciting time. 

Whether it was Teddy Ruxpin, the Nintendo Entertainment System, or the latest G.I. Joe fighter plane, I would wake up early Christmas morning and rush to the tree to open the presents I had waited for all year long.
 
But the analog era of the 1980s has changed and is being transported into the digital realm. 

Young people aren’t as excited about plastic and cardboard anymore. Digital assets are the new hotness. Members of the Millennial and Z generations are gifting each other NFTs instead of physical presents this holiday season.  

Opensea, the largest NFT marketplace, recently surpassed $10 billion in total volume. This trend doesn’t appear to be going anywhere. And it encompasses a lot more than just collectible JPEGs. 
 
There’s been a lot of talk recently about the Metaverse with Mark Zuckerberg announcing that Facebook was changing its name to Meta Platforms (NASDAQ: FB). This was an obvious step towards turning social media into an online virtual universe. And just like the physical universe, the metaverse has real estate. 

Many people are getting into virtual land and see it as the next blockchain gold rush. And the great thing about virtual real-estate is that there is no paperwork to sign, no agents or lawyers, and no time wasted on multiple transactions. And with smart contracts, virtual real estate deals are peer-to-peer and practically instant. It could even be possible for these digital real estate assets to be used as collateral for real world items in the near future. 
 
Two metaverse real estate projects that stand out are Sandbox (SAND) and Decentraland (MANA). In 2019, Sandbox created the decentralized gaming platform Lands. In it, users can purchase land in virtual space and do whatever they want with it. They are often populated with other digital assets and games. The potential use cases are just beginning. There will only ever be 166,464 LANDS available for purchase. 
 
Launched in 2020, Decentraland is a VR platform. In it, people are able to purchase and sell virtual items including plots of land. These digital plots are 10 x 10 meters and, like LANDS, can be used however the owner wishes. Plots can include anything from stores to skate parks. Decentraland currently hosts 90,000 of these parcels of land with some selling for as much as $2.43 million. And ultimately that’s why many are flooding into the virtual real estate space. 

During the week ending December 6, 2021, 25% of all NFT purchases through NonFungible.com – over $300 million – were for digital real estate. 

Is it a fad? 

It’s hard to say. But with companies like Facebook (Meta) jumping on board I see a lot of growth potential. In 2020 the metaverse was valued at $44.69 billion. Many experts predict a $600 billion market by 2027. 
 
I for one would be thrilled to receive a digital Christmas gift – whether an NFT, virtual real estate, or tokenized portion of a popular work of art. 

And unlike the toys of my childhood, I won’t have to worry about them losing value after I’ve opened and played with them.

We’ll be launching my Crypto Cycle premium research service first thing in the new year. Click here to be notified when it’s available for purchase.

Keep showing up,

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Chris Curl
Editor, Crypto Cycle


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