There are no shortages of high-growth trends for traders to be enamored with right now. Cloud computing, telehealth, cybersecurity and even marijuana, represent various sustainable double-digit growth opportunities.
Yet none of these opportunities can offer the market potential that the metaverse offers.
But there is no one-size-fits-all way of investing in the metaverse. Rather, there are two ways investors are able to stake their claim to this potential $30 trillion pie.
1. Diversify. Diversify. Diversify!
To start with, investors could gain metaverse exposure by putting their cash to work in metaverse-targeted ETFs. The Roundhill Ball Metaverse ETF, which Matthew Ball has helped bring to the market this past year, is arguably one of the best examples in the ETF space.
The idea that’s behind a metaverse ETF is simple: To operate a virtual realm will require a lot of working parts. There needs to be the computational power to support the metaverse, the networking and bandwidth to provide data, payments to handle virtual ecosystem transactions, hardware to give users access to virtual worlds, and identity security to make sure that digital assets and user identities stay protected. Mind you, this is a little snippet of the intangible and physical needs of the massive virtual ecosystem. This means dozens of companies may play a role in supporting the metaverse.
The Roundhill Ball Metaverse ETF has 45 holdings, with 7 countries that are represented in the portfolio. Most importantly, $ 68 billion is the median market cap of these 45 holdings. It is the typical company that is being held by the ETF that will be time-tested and profitable. These stocks will have clear metaverse ties, and there is a very good chance that these corporations will also have highly profitable core businesses that will pay for metaverse development and research. Translation: You can rest well if you decide to buy this ETF.
The one small thing is you will pay a 0.75% net expense ratio, which is a little bit more than the weighted average of the expense ratio for all the ETFs. But if the metaverse turns out to be everything it is suppose to be, a 0.75% expense ratio would be very well worth it.
2. Buy individual stocks with metaverse exposure
If ETFs are not your thing, a 2nd way to get metaverse exposure would be to directly invest in companies that have metaverse ties.
The good thing about this method is it lets you place greater weight on the companies you think will perform better. Also, with most online brokerages getting rid of minimum deposit requirements and commission fees, there are no commissions or fees to buy stocks on the major United States exchanges. Plus, this method can save you some money, compared to purchasing an ETF.
On the flipside, purchasing individual stocks will take more ongoing and initial research. Thankfully, a lot of the companies that are involved in the metaverse are already well-established.
For example, Microsoft has a lot of different ways that it can benefit from the metaverse. The company’s cloud infrastructure sector, Azure, is already No. 2 in the global cloud industry. Cloud computing and storage will be required to take care of the mountains of information and data generated within the metaverse.
Microsoft has made waves by announcing its all-cash deal to buy gaming company Activision Blizzard for $68.7 billion this past month. Activision recently has had 390 million active users a month, some of which have already been playing games within the virtual platforms. The Activision buy is another way that Microsoft can bring more people into its vision of a digital/virtual ecosystem.