The word “Metaverse” was first used in the book Snow Crash, which came out in 1992. Since then, it has been used a lot. Since then, there have been several versions of virtual worlds that, for many of their users, feel almost as real as the real world. World of Warcraft and Second Life are two examples. When Facebook changed its name to Meta Platforms, people became more open to the idea of the Metaverse. Also, people are interested in learning how to invest in the Metaverse, just like they are in learning how to invest in cryptocurrency, blockchain, and non-fungible tokens (NFTs). This observation uses the Alerian Galaxy Immersive Digital Worlds Index (DWRLD) as a benchmark to answer some of the most frequently asked questions about indexes and index-linked ETFs in the Metaverse.
What is the Metaverse?
Most people think of the Metaverse as “the next step after the Web” and “the next step in social connectivity.”
Like the web, there will be only one Metaverse, and people will be able to use their computers and mobile devices to get to it. Now, the Metaverse is a mix of social networking and gaming, with immersive role-playing games, money, and avatars that can be changed.
If Metaverse is still young, why do we already have indexes and passive ETFs?
Even though most investors may be familiar with companies like Meta Platforms (META) and Roblox (RBLX), an index of shares connected to the metaverse could give investors access to a group of shares with similar themes through an index-linked ETF. If the Metaverse is the next step for the web, which has changed quickly since it started, it makes sense to keep an eye on this market early on and take advantage of growth opportunities. Estimates say that Metaverse’s financial system could grow from $500 billion in 2020 to $800 billion in 2024. (3) The most effective way for people to get entertainment and information is changing over time, just like the streaming and gaming industries, which overlap in some ways (read more here).
What is the purpose of a Metaverse Index?
The Alerian Galaxy Immersive Digital Worlds Index is a list of stocks that are used to improve immersive digital ecosystems (DWRLD). The index divides Metaverse’s business world into three main areas, which are explained in more detail below.
What do crypto and the Metaverse have in common?
The Ethereum blockchain is what makes Decentraland and other sites work. Decentraland is made up of digital real estate NFTs called “LAND” that are managed by “smart contracts” on Ethereum and can be bought with “MANA” cryptocurrency tokens. (4) Even so, blockchain may not be used in all virtual worlds. Popular games like Roblox, Minecraft, and others can be played on more than one platform. Avatars and foreign currency are unique to each person and are never given to other people. Even though people can build on their land, they don’t have full ownership rights to their things like they do on platforms built on the blockchain.
How does the Metaverse connect to other areas of study?
As it is now, the Metaverse is mostly about the gaming industry, but it also has some connections to the blockchain and other digital industries. But the Alerian Galaxy Global Blockchain Equity, Trusts, and ETPs Index and the S-Network Streaming and Gaming Index (STREAM) are not the same as DWRLD (BCHAIN). As of July 22, DWRLD has done better than STREAM, even though it has more weight in the information technology sector and less weight in the consumer discretionary sector. BCHAIN has a wider range of business sectors than DWRLD, which is more focused on businesses related to the internet. DWRLD is made up of large-cap stocks like Meta Platforms (META), Amazon (AMZN), Apple (AAPL), Alphabet (GOOGL), and Roblox (RBLX), as well as popular gaming stocks like Activision Blizzard and Electronic Arts (EA), and social media stocks like Twitter and Snapchat (SNAP).
What ETFs that track an index are available right now?
Even though DWRLD is now linked to a Canadian-listed ETF called the CI Galaxy Metaverse ETF, there are only a few passive U.S. ETFs with a metaverse theme (CMVX CN). The oldest ETF didn’t come out until more than a year ago, and most of them only have a small number of full assets.
The Metaverse is still pretty new, and it has a lot in common with the gaming industry. As blockchain technology improves, the Metaverse may become more like a decentralized space, which could help new businesses grow. With the help of metaverse indexes and the ETFs that track them, customers will be able to watch how the market changes and get a head start on what could be the next version of the web.