Is Meta going to make things better? Every mainstream media outlet has painted a depressing future in which we are all doomed to be mindless robots in a silly goggle, and Mark Zuckerberg controls everything, ever since Mark Zuckerberg announced that Facebook would change its name to Meta and go all-in on building the next big thing called the Metaverse.
Well, it's the simplest story to tell and the one with the most clicks. But there's a catch. Whether you believe in the Metaverse or not, and whether or not Facebook succeeds in creating the next Metaverse, there will undoubtedly be some projects, companies, and crypto tokens that will reap significant benefits from this Meta-revolution, providing us investors with once-in-a-lifetime opportunities to make life-changing investments. And that is precisely the point of this article.
In this article, I'll show you how to invest in the Metaverse, what stocks and cryptos you should purchase, and how to establish a Metaverse portfolio that can possibly deliver you 10X returns over the next 5 years.
If you Google Metaverse right now, you'll probably come up with hundreds of different definitions attempting to describe what the Metaverse is. After reading hundreds of articles and research papers over the past few weeks, I've decided that this definition of Metaverse, originally authored by Matthew Ball, is by far the greatest Metaverse definition that I've found. The below picture tells us what he said about Metaverse.
I don't want to waste half of this article debating what the Metaverse is because, first and foremost, I'm very sure you've already defined what the Metaverse means to you.
But, even more crucially, whatever description we come up with right now will most likely be meaningless in 5-10 years, because the Metaverse will look nothing like it does now. We're still in the very early stages of the Metaverse's evolution.
The single most critical thing for an investor who wants to invest in and profit from the Metaverse at this early stage is to have a clear framework of each component that will form the future Metaverse.
So, this is the framework I'm utilizing as a guide to assist me to decide how to invest and deploy my money in the Metaverse. In general, the Metaverse's evolution will be aided by four critical components.
No matter how the Metaverse evolves in the future, it will not be possible to construct it without these four essential components.
The hardware and virtual platform are the first two components
The hardware and virtual platform are the first components. This is the component that connects people in the real world with those in the virtual world. This comprises consumer-facing and industrial development gear together to build an immersive virtual environment in which users and businesses can engage in any social or economic activity.
Computing and networking are the second most important aspects of Metaverse development
Computing and networking are the second most important aspects of Metaverse development. This is the component that allows a network connection between the physical and virtual worlds to be durable, secure, high bandwidth, and real-time. We also require huge cloud computing, data transfer, physics computation, rendering, AI prediction, motion capture, and translation at the Metaverse network's backend. This is the component that creates and runs the Metaverse's full backend operating system.
Decentralized financial services and asset identification are the third components, which are totally constructed and backed by Blockchain technology.
The decentralized financial services and asset identification, which are wholly constructed and backed by Blockchain technology, are the third component. All of the cryptocurrencies and tokens, as well as decentralized finance protocols, payment processors, and NFTs come into play here.
"The Metaverse is where the future economy is, and it will be 10 times larger than the real-world economy," Mark Zuckerberg stated.
Consider this: what is the definition of an economy?
Ray Dalio provides the cleanest and most straightforward definition. "An economy is the whole sum of all societal transactions."
Metaverse will be nothing more than a gorgeous 3D virtual entertaining platform without goods and service transactions and value exchanges between users. As a result, Blockchain will play a critical and irreplaceable role in the Metaverse's evolution.
Without a single centralized authority, each thing in the Metaverse can be uniquely identifiable and freely traded between users.
Simply said, this is the component that allows the Metaverse to genuinely work as a real economic environment, where people may do anything from providing products and services, generating employment, and earning money, to spending that money and trading values with other users, with complete freedom.
The creation and management of content is the final key component
Okay, content creation and management is the final big component. Content is, without a question, king. What we see, do, and experience in the Metaverse are all determined by the contents. If the first three components help to develop the Metaverse's basic infrastructure horizontally, the last component, the content component, helps to expand our experience in the Metaverse vertically.
Okay, so these are the four main elements of the Metaverse. And we may utilize this as a starting point for deciding how to invest in Metaverse's future.
Here, we have a straightforward investment approach and plan. Our investment strategy will consist of a mix of high-growth companies and high-quality crypto assets.
In each of these four primary Metaverse components, we'll seek companies and crypto initiatives that are either no-brainer monopolies or first movers with an accelerating network impact.
Then we acquire stocks and crypto tokens, with a 5-year time horizon as a minimum. Cool, there are three no-brainer monopolies in this sector.
The first component, the hardware, and virtual platform.
1. ASML
You may not have heard of ASML yet, but I am confident you are familiar with some of their incredibly powerful clients, such as Intel, TSMC, Samsung, Toshiba, or even Apple's own M1 chips.
The entire Metaverse must be run on incredibly powerful yet small devices, which necessitates extremely powerful semiconductor chips, and the future of the entire semiconductor industry is built on ASML's patented EUV lithography technique. As a result, buying ASML stocks is a classic picks and shovels strategy.
ASML will always make a great profit, regardless of whether the hardware business finally sucks up the most market share or which semiconductor company receives the most Metaverse contracts.
2. Unity
This is simple to comprehend. If you have a virtual reality headset and play around with it for a time, you'll notice that it's nearly impossible to find a VR application that isn't driven by Unity software.
That's true, Unity has a stranglehold on game engine software development, and they'll undoubtedly become the leading player in Metaverse virtual platform development.
3. Matterport
Matterport is a spatial data company, it turns buildings into data. Matterport develops both hardware and software that enables users to create dimensionally accurate, extremely realistic 3D virtual reality twins of any home, any office building, apartment, hotel, shopping mall, or even large stadium, and allows other users to interact with it on any devices and other developers to build more applications on top of their spatial data.
Simply put, Matterport's technology allows anyone to literally copy and paste any of their space from the real world to the virtual world at exactly the same dimension with their smartphones.
They have a monopoly in this market and benefit from significant first-mover advantages. Top companies like Airbnb and Hilton Hotels have already adopted their technology. And they're on the verge of securing a development partnership with the Facebook Oculus team to assist them in the development of the Metaverse projects. Matterport has huge growth potential in the next 5 to 10 years.
The second component, computing, and networking
Nvidia is, without a question, the easiest and most powerful company to acquire in this sector. Metaverse will necessitate a significant amount of computing power on the graphics processors or GPUs. And Nvidia is unquestionably the world's best player in this field.
No one else in this space can even come close to competing with them. In any Metaverse portfolio, Nvidia is the most critical stock to buy. Cloud computing will also play a significant part in the Metaverse.
Amazon, Alibaba, and Google are just a few of the big brands in this industry. But, in terms of the early stages of Metaverse growth, I believe Microsoft will be the largest winner out of all of these cloud computing behemoths.
Microsoft offers the world's largest cloud database for both B2B and B2C workplace data, as well as the world's best professional workplace ecosystem. Three sorts of applications will dominate the early stages of Metaverse: entertainment, socializing, and co-working. In the virtual world, Microsoft can easily dominate the professional co-working area.
Microsoft, in fact, was a pioneer in the Metaverse long before Facebook. Mesh for Teams, a virtual workplace for its clients and internal staff has already been introduced. In addition to graphics processors and cloud computing, cybersecurity will be critical in the Metaverse.
However, finding an absolutely dominant player who will be the top player in the Metaverse in the cybersecurity space is quite difficult. Investment in a cybersecurity ETF, such as $HACK, is the best way to play it.
Decentralized applications and financial services on Blockchain is The second key component
In the near future, this is the component that will most likely deliver the most aggressive returns. Purchasing tokens from a growing Metaverse-focused decentralized project is the most straightforward approach to investing in this sector.
Some individuals refer to these tokens as Metaverse cryptos. Here are two of my all-time favorite Metaverse coins that I feel everyone should have in their portfolio.
1. The SandBox Token
The SandBox is the first, with the token $SAND. SandBox is a virtual metaverse platform where users may create, own, and even monetize their own virtual worlds. It's essentially a decentralized version of Roblox that runs on the Blockchain.
People in Roblox transact with each other using Robux, which is a virtual currency issued by the corporation in an endless quantity. Users in SandBox transact using $SAND tokens without the need for a central authority, and the total supply of $SAND tokens is fixed, similar to Bitcoin.
As a result, the more people who come to SandBox to construct, play and transact, the more valuable each $SAND coin becomes. SoftBank, one of the world's leading technology venture capital firms, financed the entire SandBox Metaverse project.
SandBox is one of the fastest-growing Metaverse initiatives on Blockchain, with enormous first-mover advantages.
2. Decentraland token $MANA
Since its launch in 2015, Decentraland has quickly established itself as the go-to digital realm for simulating our real-world environment. People in Decentraland can participate in virtual events, play games, socialize with their peers, or sell digital goods in the marketplace to earn money.
And what makes this project so popular right now is that people have started investing in and selling digital lands on Decentraland, and are making life-changing money.
All of these transactions, of course, were carried out in the native currency, the $MANA token. On average, one plot of land in Decentralands can be sold for roughly 7000 $MANA tokens, or 21,000 US dollars at today's price, as of early 2021 this year.
Decentraland is currently one of the fastest-growing Blockchain platforms, and I believe its meteoric rise is only the beginning.
Okay, I understand what you're thinking. What if I'm not sure what all of these new Metaverse tokens mean? Decentralized projects are new and dangerous; what if one of them fails and the token value drops? Is there any alternative way for us to gain any traction in the decentralized blockchain sector without taking too many risks?
Yes, directly owning Ethereum is the simplest method to invest in this market as a newbie. In reality, both $SAND and $MANA, the Metaverse tokens I described before, are based on the Ethereum network. Ethereum is the technology that supports the whole decentralized universe.
If Bitcoin is the digital gold, Ethereum is the digital oil that keeps the Metaverse running. So, especially for newcomers, purchasing and keeping Ethereum is a no-brainer.
The last component, the contents
This, I believe, will be the section with the most competitiveness in the near future. Competition is beneficial to consumers, but it is never beneficial to investors.
As a result, I attempt to limit my capital investment in this field. But, if I had to pick just one top content-focused participant who will prosper in the Metaverse's development, I'd go with Roblox. Roblox recently had a record-breaking quarter.
Their phenomenal growth has outperformed every single Wall Street analyst's projection, and the floor price has risen by more than 40% since the earnings call. Roblox has developed a strong network effect with brand effect around their business as a robust moat as a young firm and has maintained an almost 30% free cash flow margin over the last decade, which is incredibly remarkable for an early-stage software company.
Roblox currently has 47.3 million daily active users. Roblox's daily active users could easily surpass 1 billion in 5 years as a significant Metaverse-focused platform and content provider brand. Roblox is still grossly under-monetized, despite the fact that it has such a large user base.
Here's an example of a simple comparison: With 2 billion daily active users, Facebook earns $110 each hour of user engagement. With 280 million daily active users, YouTube earns $119 every hour of user engagement.
Roblox, on the other hand, with 47 million daily active users, is only receiving $24 per hour of user involvement as profit because the company is still in its early stages and is largely focused on investing in game developers.
Once their platform has matured enough, they will begin to explore additional revenue streams, and this figure will undoubtedly rise. Roblox is going to have a really fascinating run with the Metaverse over the next 5 to 10 years, regardless of user growth or monetization growth.
Bottomline
That's all there is to it. These are the Metaverse equities and cryptocurrencies that I feel will gain the most from Metaverse's early stages of growth. You should definitely give it a try to above-described projects if you are planning to invest in Metaverse.
DISCLAIMER and RISK WARNING: Investing and trading have a lot of potential benefits, but they also have a lot of risks. You must be informed of and willing to accept the dangers. Don't risk money you can't afford to lose by trading. I am not a financial advisor or an investment advising service. The data and information presented are merely educational and informative. Nothing in this website, including the information it contains, should be interpreted as advice to purchase or sell stocks, futures, indices, FX, cryptocurrencies, or commodities.