A war. A pandemic. A climate crisis. It’s no accident that investors and corporates see 2022 as the year to invest in digital real estate.
The collapse of physical buildings in kinetic warfare, the collapse of housing prices in a debt-induced recession, and the collapse of critical national infrastructure in floods, fires, and storms, are all risks that leave traditional real estate investors thinking the same thing:
How do I protect my physical assets in a world that is becoming more physically vulnerable every day?
Investors and corporates are rapidly adopting what seems to be an elegant solution.
Investing in assets that can’t be bombed, that don’t burn or wash away, and that can be occupied by anyone, anywhere.
Welcome to the Metaverse and the world of digital real estate.
A world where real estate developers Republic Realm spend $4.3m on a plot of digital land in The Sandbox metaverse.
A world predicted to reach $105bn by 2030, registering a staggering 45.2% annual growth rate between 2024 and 2030. (Source: Binance.com)
How should these developments affect investors portfolio decisions?
Let us first look at the traditional real estate market where a post-pandemic return of workers to cities has led to a worrying set of economic indicators that mirror the 2008 housing market moments before its crash.
Average take home pay is flat or declining, property prices are soaring, yet the underlying pressures on the real estate market seem to be pressing downwards. This means mortgages could very quickly become debts not assets, a harrowing thought for those still feeling the pain from the collapse of Lehman et al.
People hate to think about bad things happening so they always underestimate their likelihood, and for investors in this climate, the opportunity cost of not investing in the metaverse, where digital property prices in metaverses like The Sandbox have risen 500% in 6 months, is now significant.
The important questions that investors who wish to diversify their portfolio need to answer are:
Can crypto, NFTs, and metaverse real estate:
1) be a profitable, sustainable component of my longterm diversified portfolio?
2) provide significant short term supernormal profits, in a world that is increasingly physically insecure?
The first 6 months of 2022 have given investors good reason to believe in the longterm viability of the metaverse real estate dream and this investment opportunity.
First, the significant projects in the metaverse have all had major milestone successes. Microsoft Metaverse and Meta both released footage of their metaverse 3D avatars within weeks of each other, laying the ground for an epic battle of the tech titans for metaverse dominance.
Augmented (AR), Virtual (VR) and Mixed Reality (MR) are a focus for both tech giants, which should mean highly advanced new technology for consumers hitting the shelves in the next 24 months.
With high spec tech under development, investors can expect both the value of the companies building digital real estate, and the value of the digital real estate itself, to experience significant spikes in prices every time major hardware is announced or released.
Second, and perhaps more importantly for investors, the underlying conditions for digital real estate success, seem highly favourable compared to traditional real estate markets.
The cost of building metaverses is almost certain to fall at a faster rate than the cost of building real estate given the billions being spent on superstar developers, and the plateaued cost of bricks and mortar. This should translate into faster rising margins within digital real estate, than traditional real estate; a cause for celebration for early metaverse investors.
The knowledge level of both investors and consumers is also almost certain to increase at a faster rate than the knowledge level within traditional real estate. As the first metaverse projects scale up, mass consumer adoption will drive retail consumers and less specialised investors into the industry, further driving up price of digital land and metaverse company stock prices.
All of this points to a mighty tailwind for metaverse real estate. So how do you invest?
You can buy and build in third party metaverses such as The Sandbox by approaching them directly.
You can build your own native crypto, nft and metaverse ecosystem designed bespokely for your audience.
You can do both and connect your multiple metaverse ecosystems through owned brand assets on mobile, web and console (the Holy Grail of metaverse ecosystem building).
Whichever strategy you choose, digital real estate looks as if its here to stay.
Are you ready Player One?
If you want to learn more about investing in the metaverse, digital real estate, and crypto & nfts, visit www.1UPMetaverseCreative.com. 1UP are a bespoke crypto, nft and metaverse creative agency who will incept and execute your crypto, nft and metaverse ecosystem investments.
