The metaverse, it appears, is the “next big thing.” So big that one company changed its name to Meta Platforms and multiple ETFs dedicated to metaverse investing have been created, the largest of which has about $900 million in assets and operates under the ticker META.

And now, Deloitte has launched its Unlimited Reality offering to help “educate, inspire, accelerate, and execute on client goals for the metaverse.”¹

What is the Metaverse?

The metaverse is the next evolution of the internet in which it becomes a shared, virtual space that will allow people (perhaps millions) to simultaneously connect in online worlds.

Its content will be rich in video, sense of space, audio and text, with immersive experiences created and managed by a wide range of actors—from large corporations to freelancers. Finally, it will be its own functioning economy, where work can produce value and assets can be created, bought and sold.

What are the Investment Opportunities?

Like the cable industry and the internet before it, there are two basic ways to invest in the potential growth of the metaverse: invest in the suppliers to this new industry or the companies competing to sell their offerings.

• Infrastructure—These companies include suppliers of needed computing power (e.g., networking companies; the developers of tools, protocols and engines; digital payment processors; associate hardware developers).
• Providers—These companies are those that develop and manage the digital environments and worlds in which individuals and businesses choose to operate.

Bloomberg estimates the market opportunity will reach $800 billion by 2024.² Remember, these opportunities span from the diluted (i.e., large companies whose exposure is marginal to their primary line of business) to undiluted opportunities (i.e., companies whose entire success is tied to exposure to the metaverse future).

Future Economic Implications

The promise of the metaverse for businesses and the economy is both exciting and unknowable. Just think … could internet users in 1995 have imagined today’s internet?

Consider the shopping experience. Today, if you go to an online retail site, you’ll see a flat screen with pages of choices that you can scroll through. In the metaverse, shoppers will be able to try on these items in a virtual store location and see how it looks and fits on them … well, really their avatar.

Highly visited real estate in the metaverse will become the new malls, in which owners can rent out to retailers.

Companies will create new worlds to advance branding and selling, while children attend school and workers come together to collaborate on projects and products.

It is early days and with that comes some level of hype that is sure to burn some investors in the short-term (think the dot.com bubble), but for now the metaverse looks a lot like the future.

Source:

1. https://www2.deloitte.com/us/en/pages/about-deloitte/articles/press-releases/deloitte-launches-unlimited-reality-services.html?id=us:2ps:3gl:metapr:eng:cons:01132022:metaverse:b:c:kwd-298038977008&gclid=CjwKCAiA55mPBhBOEiwANmzoQkuT5KAHvf9MKhRyT9UtPr2tm9mGQn0HqLLW8e9ozN6SPR5gC3h5pRoC4TEQAvD_BwE
2. https://www.thestreet.com/etffocus/trade-ideas/invest-in-metaverse-an-etf-for-that

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