Currently popular Metaverse platforms require users to buy cryptocurrency 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 huge, huge 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.”
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) surpassed $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.
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.
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