Metaverse a Massive Opportunity for Crypto, Says BoA
The metaverse presents a massive opportunity for blockchain technology and will result in the widespread adoption of cryptocurrencies for transactions, global head of thematic investment strategy at Bank of America Haim Israel said in an interview this week.
The metaverse is defined on Wikipedia as a “hypothesized iteration of the internet, supporting persistent online 3-D virtual environments through conventional personal computing, as well as virtual and augmented reality headsets”.
Current popular metaverse platforms require users to purchase 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 massive, massive opportunity… You need the right platforms… that are definitely going to be a big opportunity for this entire ecosystem.” The metaverse is likely to drive a boom in development in the crypto world, the BoA strategist added, and “we’re going to start using cryptocurrencies as currencies”.
However, Israel predicted that private tokens (such as Bitcoin, Ethereum etc.) would likely prove too volatile to fill this role. Rather, stable coins such as Tether and USD Coin would more likely prevail.
As rising usage in the metaverse space brings cryptocurrencies into the mainstream, traditional payments companies will take note, Israel predicted, adding that he sees the 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 eye of more than just one Wall Street bank. Earlier in the month, analysts at Morgan Stanely noted that the metaverse could fundamentally transform the way people socialise, watch performances, engage with brands, learn and trade/speculate on digital assets such as NFTs.
According to cryptocurrency asset management Grayscale, whose assets under management (AUM) eclipsed $60B in November, the metaverse economy could be worth as much as $1T in the near future. Meanwhile, a recently released BoA report said that the metaverse economy could grow to $800B as soon as 2024.
Virtual real estate sales have grabbed the headlines in recent weeks. On Tuesday, virtual real estate development firm Republic Realm said it had purchased land for $4.3M in the Sandbox virtual world.
That comes after, 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 $2.4M.
Token.com co-founder and CEO Andrew Kiguel told CoinDesk this week that “there are several popular metaverses that stand out and Metaverse Group owns NFT-based land parcels in several of them”. “Our investment returns will be based on the appreciation of the land we hold and also our ability to develop our land and rent it out to interested groups that want to establish a presence in the metaverse” he added.
Metaverse-linked Cryptocurrencies Surging
Growing metaverse hype, which was sent into overdrive at the end of October when Facebook announced its company name change to Meta to reflect its primary focus on bringing the metaverse into reality, is driving the value of metaverse-linked cryptocurrencies higher.
SAND, the cryptocurrency used to transact in Sandbox’s virtual world, was worth under $0.70 at the start of October, but has since surged to more than $6.0 per token. Meanwhile, MANA, the cryptocurrency used to transact in Decentraland, which was also worth under $0.70 at the start of October, is currently worth around $4.50.
Decentraland’s MANA has a current market capitalisation of around $8.0B, while Sandbox’s SAND is close to $6.0B, ranking them in 24th and 39th in terms of market cap in the crypto space.
This article was originally posted on FX Empire
