Are Metaverse Cryptocurrency Tokens a Better Investment Compared to Metaverse Stocks?
Crypto is synonymous with cryptocurrencies like Bitcoin, Ethereum, Solana, Cardano, and other crypto tokens. Over a decade since the first Bitcoin whitepaper was published, financial advisors are now comfortable recommending cryptocurrency IRA investments. Still, many of us had never heard of the term metaverse until recently, when Facebook renamed their company, Meta. Currently, the phrase has become more popular with everyone talking about it. But before the Facebook rebrand there was metaverse crypto, a combination of cryptocurrency and nonfungible tokens used in a virtual universe.
What Is the Metaverse?
Metaverse is defined as a 24/7 online 3D virtual world where humans can interact, and it is projected as the next logical step in the evolution of the internet.
Some believe this virtual space will be indistinguishable from the real world, while others believe it is just another video game form. Many evangelists expect the Metaverse to foster closer social networks between us, while others believe that it is nothing more than a way to escape reality.
The truth lies somewhere between all the wild claims and skeptical beliefs.
Online virtual reality has economies built around in-game items and assets. Facebook envisions the future of the internet as a virtual network connected to 3D virtual worlds. Cryptocurrency groups believe that blockchain technology is the perfect fit for this virtual online world. Already, crypto games like Decentraland and Sandbox prove how an online virtual universe can be powered by crypto and nonfungible tokens (NFTs).
Metaverse is in its infancy stages but is expected to increase in use and popularity. At least that is the hope of some of the companies involved with it. The phrase Metaverse is a lot like the phrase cyberspace. It doesn’t precisely define any one technology or place. It is more about how you and I interact with technology.
Metaverse Pop Culture and in Present Day
The book “Ready Player One” and the movie based on the novel describes a similar virtual reality simulation where many players explore the metaverse iterations of OASIS before businesses can find the three keys. Although Ready Player One was pretty recent, the concept of a metaverse environment has been explored in pop culture for several decades.
Interestingly, almost 30 years ago, author Neal Stephenson described the Metaverse in his fictional book, “Snow Crash” The book describes it as a place to escape from reality because the natural world has become too dismal. The book is set in the early 21st century when the world economy has collapsed, and most governments have lost their power to the corporations.
People wear goggles and earbuds to live in an alternative reality in this fictional place. They can customize their avatar, stroll down pretty streets, and visit cafes and shops. Some of this already exists and are found in video games and online communities like “Minecraft” and “Fortnite.
Virtual games are a multi-billion dollar business for game makers. Even though many games are free to play, there is plenty of money to be made in the digital world. “Fortnite” by Epic Games makes more than a billion dollars per year in revenue from selling skins. Skins are the cosmetic add-ons that users use to customize their digital avatars. The skins market is estimated a $40 billion per year business.
As many as 43% of game players say that they use skins to change the appearance of their avatar, vehicles, weapons, and more. Today, there are at least 2.7 billion gamers globally, mainly between 13 and 45 years of age.
This virtual universe does include virtual reality, but not exclusively. Virtual realities can be accessed using PCs, game consoles, and even a smartphone can access this new realm. This place is characterized by virtual areas that can continue to exist and evolve, even when not in the game.
The virtual universe is a digital economy where users buy, create and sell virtual goods. The goal is to allow users to take their items like avatars, cars, and clothing from one place to another or from game to game. It is a place where players can take a created persona and everything else that they made from a virtual reality platform to any other virtual reality platform.
It is not just about games. Companies like Microsoft envision this virtual space to create virtual meeting rooms to train new hires and a place to chat with remote coworkers. With the popularity of remote work, a metaverse platform could enable coworkers to share the same digital space as if they were in the same physical space fostering team building.
There is still a lot to be worked out before much of this becomes a reality. One concern is to figure out how so many people can interact with everyone else. Virtual reality headsets are still clumsy and can cause physical pain or motion sickness if worn too long. The same problem exists with today’s reality glasses.
Non Fungible Tokens
In this virtual reality world, nonfungible tokens or NFTs are a big part of daily life. The ability to customize my looks or avatar is where nonfungible tokens are needed. An avatar is a nonfungible token. Players will buy cars, weapons, clothing, virtual land, metaverse coins, and other in-game digital assets in most virtual reality games. These items are NFTs or digital assets, and being able to trade digital assets is a big part of NFTs and this virtual world.
NFTs are stored on a blockchain which enables them to be bought, sold, and traded with other players. It goes further than just buying and selling avatars, game pieces, and other virtual goods. Companies are interested in promoting their products in the virtual world.
The idea is for blockchain games, NFTs, and brands to work together. Decentraland conducted a virtual fashion show in collaboration with Adidas. This show auctioned fashion designs as NFTs.
What Are the Top Metaverse Cryptos To Buy?
Like the real world, every virtual reality platform needs a currency to run efficiently. And in the virtual universe, the money is metaverse crypto or native token.
Many of us are familiar with cryptocurrencies like Bitcoin, Ethereum, Binance Coin, etc. But the metaverse crypto market is different and probably not as expected. A native token is a cryptocurrency used for each virtual world. For example, SAND is the native token of the virtual world, Sandbox. Each of the top metaverse cryptos is a native token of their virtual world.
Axie Infinity (AXS)
Axie Infinity is a project that closely defines what the Metaverse is, even though it is mainly a game. The currency for this game is the AXS token. Axie Infinity has the largest market capitalization of all the metaverse crypto at over $5 billion.
The Axie Infinity game includes characters called Axies, which are nonfungible tokens. Gamers can buy or trade Axies. You need a minimum of three Axies to participate. Options in the game include ability to breed players to create more players.
There is also virtual real estate in the Axie Infinity game. This virtual real estate could bring more investors to the crypto for reasons other than the game. Recently, a plot of axie virtual land sold for $2.5 million.
Axie Infinity is based on the Ethereum blockchain.
Based on Ethereum, the Sandbox crypto has been one of the better performing cryptos, recently going over $1 in late 2021. Sandbox is a game based on the creation and trading of nonfungible tokens. Players of the game create NFTs using the SAND token.
SAND has a limited circulating supply of three billion coins, with 680 million in use today. In early 2022, its market capitalization was at $3.690 billion. With a limited supply of tokens and increasing popularity, this crypto might continue to do well.
Created in 2017, Decentraland is one of the most popular cryptocurrencies brought on by the recent popularity of NFTs. This platform is mainly known for buying virtual land and letting NFT owners show off their nonfungible tokens.
Big companies are starting to look at these types of virtual reality platforms. Sotheby’s recently bought a plot of land in Decentraland and created a replica of their London office. Auction houses like Sotheby’s and Christie’s who have traditionally invested in art have now embraced virtual worlds.
Jamie Dimon has modified his original thinking around crypto. JP Morgan has entered the metaverse with an Onyx lounge. The virtual lounge in Decentraland has a virtual portrait of Jamie Dimon and a tiger walking around. When you ascend to the next floor you can see an executive presenting JP Morgan vision of the metaverse.
In early 2022, MANA had a market capitalization of $6 billion with a year-to-date gain of 247%. MANA is based on the Ethereum blockchain.
Star Atlas (ATLAS)
The Star Atlas allows you to go beyond the confines of Earth. The stars are your limit here, and you may explore an infinite variety of possibilities. You can take your own customized spaceship and venture into a unique metaverse, join or establish a faction, and build a world that is entirely yours. Imagine Star Trek blended with World of Warcraft.
ATLAS is the metaverse token that powers this universe. It’s powered by the Solana metaverse blockchain. The Solana metaverse blockchain is more centralized compared to the Ethereum blockchain and has lower fees.
You need the use ATLAS metaverse coins to buy any of the digital assets you’ll need in the Star Atlas universe, such as real estate, ships, crew members, and gear.
One of the more exciting things about Highstreet is using this currency to shop for items in the virtual universe. Users can setup Shopify type of stores and interact with then on the MMORPG gaming platforms. The products on Highstreet market are craeted by brands and can exist both in the virtual world as well as the physical world.
Highstreet is backed by the tech company HTC. As of early 2022, its market capitalization exceeded $85 million. After opening in October 2021, it has gained 90% in value.
Metahero is a new project based around creating high-definition avatars of people and real-world objects using 3D scanning. HERO has a market cap of $494 million at the start of 2022. The project has partnered with Wolf Studio and has opened a scanning chamber that creates the 3D forms for the Metahero digital universe.
Floki Inu (FLOKI)
Like DOGE, it is another cryptocurrency with a dog theme. Floki Inu is named after Elon Musk’s dog, a Shibu Inu, which happens to be the name of another crypto. The project plans to start a game and an NFT marketplace. Even though Floki Inu is still in its early stages of development, people are buying the token.
Please note that these cryptocurrency names are used as examples and should be considered as recommendation to buy, sell or trade. Always consult a licensed professional. The author or Financial Freedom Countdown are not licensed professionals or investment advisors.
Where Can I Buy Metaverse Crypto Tokens?
I can use fiat currencies like the U.S. dollar or cryptocurrencies like Bitcoin or Ethereum to buy metaverse tokens. Some of the most popular crypto exchanges to purchase metaverse tokens include:
Before I buy metaverse coins, I need to have a digital wallet. A digital wallet is where I will store my coins. You could opt for digital wallets or online wallets.
The best digital wallets are hardware wallets like Ledger or Trezor. The security of the hardware wallets is better than online wallets.
A digital wallet is necessary to open an account on metaverse platforms like Decentraland or Sandbox. One of the most popular online digital wallets is MetaMask. You can set up MetaMask by downloading their app to your phone or using a Google Chrome extension.
Pros of Investing in Metaverse Crypto Tokens
The pros of investing in these metaverse tokens are that it presents new areas to invest in. It wasn’t long ago when hardly anyone knew of cryptocurrencies. But now, they have recently become very desirable. Investors anticipate that the users of the virtual universe and the data services within it would increase substantially.
Decentraland and Sandbox have been the hottest metaverse crypto because they have fully functional virtual worlds where NFTs can be used. Their tokens have skyrocketed as much as six fold recently. Much of these gains have been fueled by speculation.
Other tokens are projects in the beginning stages. Many novice investors have pushed token prices higher because they want to start something big and own a piece of the digital world. The crypto market is an exciting and fast-paced market for investing.
Cons of Investing in Metaverse Crypto Tokens
Investing in well-established cryptocurrencies like Bitcoin or Ethereum is risky and volatile. So investment in metaverse crypto tokens with lower adoption will be more volatile and dangerous.
Although investing in stocks is volatile, small-cap crypto would be much more volatile.
The cons of investing in these tokens are prices are high, and it might be better to sit on the sideline and watch what happens. I would not invest my life savings in these metaverse tokens as with any risky investment. But investing a little play money might be worth it for me. Of course, everyone’s financial situation is different so make sure you evaluate your own risk profile. Also have your personal finance basics in order before investing.
What Are the Metaverse Stocks To Invest In?
If metaverse tokens are riskier to invest in, it might make sense to consider metaverse stocks.
There will be a lot of infrastructure in building the 3D virtual world, just like infrastructure is needed in the real world. Several well-known companies are involved in creating the 3D universe. Everyone is waiting to see what Meta will do in their virtual universe. Apple and Microsoft are other players expected to announce plans. These stocks have been a part of my moonshot portfolio for several years, outperforming the general market.
Of course, Facebook or Meta (FB) is the one we most know about, but there are other stocks involved in building this virtual universe to invest in that include:
- Roblox (RBLX)
- Autodesk Inc (ADSK)
- Unity Software (U)
- Nvidia Corp. (NVDA)
- Microsoft (MSFT).
- Qualcomm Inc. (QCOM)
- Fastly (FSLY)
Microsoft has recently announced its intention to buy Activision Blizzard, which is expected to be a big player in the gaming aspect of the virtual world. Along with Unity Software, Autodesk writes the software to allow designers to create 3D models.
Nvidia makes the semiconductors that run computer graphics and should benefit from creating virtual games and 3D worlds. Fastly is a cloud technology provider. And the cloud is where the virtual world is stored.
Another way to invest in the virtual universe is to buy shares of an exchange-traded fund (ETF) that holds many companies involved in every aspect of the virtual universe. One such ETF is the Roundhill Ball Metaverse ETF (METV). This ETF offers investors broad exposure to the stocks that are expected to participate in the virtual universe. In addition to the above stocks, METV also holds around 45 stocks, including the following:
- Apple (AAPL)
- Snap Inc (SNAP)
- Taiwan Semiconductor (TSM)
- Amazon (AMZN)
- Sea Ltd. (SE)
- Advanced Micro Devices (AMD)
Please note that these stock names are used as examples and should be considered as recommendation to buy, sell or trade. Always consult a licensed professional. The author or Financial Freedom Countdown are not licensed professionals or investment advisors.
Buying Metaverse stocks is also not without risk. Facebook CEO Mark Zuckerberg aims to transition Facebook from a social media company to a metaverse company in the next five years. The VR headset Oculus Quest is getting us closer to augmented reality. But based on the recent earnings-related to lower social media usage, Facebook dropped over 26% in a single day, erasing over $230 billion in market cap.
My approach to buying these Metaverse stocks is always automated dollar-cost averaging using no-fee platforms like M1Finance, which permit you to invest as little as $100 spread across several stocks. You can read my M1Finance review and why I prefer it over other larger platforms like Schwab, Vanguard or Fidelity.
Final Thoughts on Metaverse Crypto
The virtual universe has gained popularity since Facebook changed its name to Meta. Along with this new popularity, more people learn about NFTs and DeFi.
The 3D world of virtual reality holds many possibilities with top metaverse gamers and companies interested in spreading their brands to the virtual universe. Brands can hold exhibitions, and fashion shows to showcase their products using 3D virtual reality and NFTs.
Each of these virtual worlds requires metaverse crypto, with Decentraland, Sandbox, and Axie Infinity being the most popular at this time. You and I can participate in this exciting new world by trading metaverse tokens on Crypto exchanges like Coinbase, Binance, and BlockFi.
One can also use a “sell the shovels in a gold rush” approach by investing in Metaverse stocks using no-fee platforms like M1Finance.
As with any investment decision, make sure you stick to your asset allocation plan and diversify. All crypto is volatile and extremely risky. If risk-averse, consider other income-producing assets like stocks or real estate notes.
Readers, would you prefer living in a virtual reality world? Would Metaverse have the same potential as the first introduction of the internet? Have you considered investing in the Metaverse via crypto or stocks?
John Dealbreuin came from a third world country to the US with only $1,000 not knowing anyone; guided by an immigrant dream. In 12 years, he achieved his retirement number.
He started Financial Freedom Countdown to help everyone think differently about their financial challenges and live their best lives. John resides in the San Francisco Bay Area enjoying nature trails and weight training.
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