Metaverse Hype Continues: Will NFTs Be Included?
NFTs have enabled people to collect and trade digital artworks. Will NFTs be included in the metaverse?
Oct. 29 2021, Published 2:38 p.m. ET
NFT (non-fungible token) trade is booming. Investors, including reputable corporations like Visa, are paying top dollars for pieces of digital artwork. Facebook, which is going to the metaverse, is also in the NFT business. What role will NFTs play in the metaverse?
Facebook CEO Mark Zuckerberg has staked the company’s future on the metaverse. The company has changed its name to Meta Platforms to more accurately capture its transformation into a metaverse company. There are many doubters but Zuckerberg thinks that the future will prove him right and Facebook investors will become more prosperous.
The metaverse promises to bring unprecedented economic opportunities and investors are eager to be part of it. Since the metaverse is still a work in progress, many investors are trying to understand the best metaverse stocks to buy now.
Why investor want in on the metaverse early
Investors want to get early exposure to metaverse companies. Those who invested in Amazon stock early made huge profits when e-commerce exploded. Tesla has also made early investors proud as electric cars adoption expands. Bitcoin didn’t look at the beginning, but it turned out to be a lucrative investment for those who took a leap of faith and put money in it even though the future looked fuzzy.
After Bitcoin price hit a record high of about $67,000 in October 2021, even those who only invested $10 in the crypto’s early years became millionaires.
What’s a metaverse company?
Metaverse is a future virtual world that will require the efforts of a diverse range of companies to build. In that world, people will be able to meet, work, and play without being physically together. It will be enabled by virtual reality and augmented reality systems, mobile apps, and ultrafast mobile internet that 5G is bringing.
A metaverse company is one that's contributing to building this virtual global space or will have a role in supplying the products and services needed in that virtual world.
What are the best metaverse companies to invest in now?
Facebook or Meta Platforms has become an obvious company to consider for people who are interested in investing in this space. Through its Oculus unit, the company is developing the hardware systems that people will need to get into the metaverse. Its family of social apps will likely enable social connections in the virtual world. Apart from Facebook, the other metaverse companies investor might consider are:
Roblox (RBLX)
Nvidia (NVDA)
Meta Materials (MMAT)
Amazon (AMZN)
Tencent (TCEHY)
Verizon (VZ)
Roblox operates a platform for developing kids’ games, and many titles there have metaverse elements. The company aims to transform itself into a virtual environment where people not only come for games, but also work, socialize, and shop. Apart from Roblox, other game developers that could contribute to entertainment in the metaverse are Activision Blizzard (ATVI), Electronic Arts (EA), and Take-Two (TTWO).
The metaverse devices, like those that Facebook is developing and the computing systems that will power the virtual space, will require powerful and smart semiconductor components. Nvidia is at the forefront of developing such chips.
Meta Materials is a Canadian material sciences company. Its products are used in manufacturing consumer electronics. It thinks that companies like Facebook might need its materials for their metaverse-related technologies. Meta Materials shares soared after Facebook rebranded to Meta Platforms.
Many apps run on the cloud now. The systems that will power the metaverse will rely on cloud computing. Amazon is the leading cloud provider and stands to benefit from the metaverse boom. Other cloud vendors, like Microsoft and Google, will benefit as well.
Tencent is a Chinese social media, mobile payment, videogame, and cloud company. It has built a super app called WeChat that now looks like a mini metaverse. Tencent has metaverse ambitions going by its patent applications related to that future.
The metaverse system will require a strong and reliable internet connection to enable real-time virtual interactions. It means that 5G will have an important role to play in making the virtual world a reality. Verizon, AT&T, and T-Mobile are rolling out 5G networks to power the metaverse. For these network providers, metaverse promises to increase the demand for their 5G services, which would allow them to make more money and perhaps distribute more to shareholders in dividends and buybacks.
Will NFTs have a role in the metaverse?
Facebook or Meta Platforms has said that its metaverse will support NFTs. For example, people will be able to decorate their virtual spaces with NFT artwork. NFTs are expected to be a revenue idea for the metaverse and Decentraland crypto might be a great model. On this blockchain platform, people can purchase and develop virtual plots of land that are rendered as NFTs.
Facebook’s talk of NFTs in the metaverse also sent Ethereum's price soaring. Ethereum has become the favorite platform for building and trading NFT apps.
If NFTs are going to be included in the metaverse, cryptocurrencies won’t be left behind. People could use cryptos to trade and pay for purchases in the virtual environment. It isn't a surprise that regulators are trying to remove the hurdles for banks to get into the crypto business.
