The Metaverse represents a tremendous opportunity for blockchain technology and will lead to widespread adoption of cryptocurrencies for transactions, Bank of America’s global head of thematic investment strategy, Haim Israel, said in an interview this week.
The Metaverse is defined on Wikipedia as “a hypothetical iteration of the Internet that supports persistent online 3-D virtual environments through traditional personal computing and virtual and augmented reality headsets.”
Currently popular Metaverse platforms require users to buy cryptocurrency in order to participate in the platform’s virtual economy, where objects and even now virtual real estate can be bought and sold in the form of non-fungible tokens (NFTs).
According to BoA’s Israel, “This is a massive, massive opportunity… You need the right platforms… This is definitely going to be a huge opportunity for this entire ecosystem.” The metaverse will likely fuel a development boom in the crypto world, the BoA strategist added, and “we will start using cryptocurrencies as currencies”.
However, Israel predicted that private tokens (like Bitcoin, Ethereum, etc.) would likely prove too volatile to fill that role. Rather, stable coins such as Tether and USD Coin would prevail.
As increased usage in the Metaverse space brings cryptocurrencies into the mainstream, traditional payments firms will take notice, Israel predicted, adding that he sees room for “a lot of collaboration between the two.”
Investors taking note of Metaverse opportunities
The financial opportunities presented by the metaverse have caught the attention of more than one Wall Street bank. Earlier this month, analysts at Morgan Stanely noted that the Metaverse could fundamentally change the way people connect, watch performances, engage with brands, learn and trade/speculate on digital assets like NFTs.
According to cryptocurrency asset manager Grayscale, whose assets under management (AUM) eclipsed $60 billion in November, the Metaverse economy could be worth as much as $1 trillion in the near future. Meanwhile, a recent BoA report said the Metaverse economy could grow to $800 billion as early as 2024.
The story goes on
Virtual real estate sales have made headlines in recent weeks. On Tuesday, virtual real estate development company Republic Realm announced that it had bought land for $4.3 million in the Sandbox virtual world.
After that, Metaverse Group, a subsidiary of publicly traded digital asset investment firm Tokens.com, announced last week that it had bought land in Decentraland’s virtual world for $2.4 million.
Andrew Kiguel, co-founder and CEO of Token.com, told CoinDesk this week that “there are several popular Metaverses that stand out and the Metaverse Group owns NFT-based land parcels in several of them.” “Our investment returns are based on an appreciation of the land we own and also on our ability to develop and lease our land to interested groups looking to establish a presence in the metaverse,” he added.
Metaverse-Linked Cryptocurrencies on the Rise
The growing Metaverse hype, which kicked into high gear in late October when Facebook announced the company’s name change to Meta to reflect its primary focus on making the Metaverse a reality, is driving the value of metaverse-linked cryptocurrencies higher.
SAND, the cryptocurrency used for transactions in Sandbox’s virtual world, was worth below $0.70 in early October but has since surged to over $6.0 per token. Meanwhile, MANA, the cryptocurrency used for transactions in Decentraland, which was also trading under $0.70 in early October, is currently worth around $4.50.
Decentraland’s MANA has a current market cap of around $8.0 billion, while Sandbox’s SAND sits at nearly $6.0 billion, ranking them 24th and 39th in terms of market cap in the crypto space.
This article was originally published on FX Empire
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