Even With a Market Correction, Metaverse Real Estate Prices Remain Unscathed
EEven though portfolios have plummeted in 2022 for traditional stock investors and many crypto enthusiasts, another type of investing seems to be holding up: real estate metaverses on platforms like Decentralized and The sandbox.
How and why it holds tight isn’t much of a mystery if you look beyond the surface of the situation. After all, the metaverse – where people interact virtually – is made up of semi-isolated, self-contained economies, each housed in individual virtual domains with rules of their own. But self-reliance isn’t the only reason the value of metaverse real estate has held relatively steady despite a free fall for a wide range of other investments.
1. Virtual real estate is often bought for a specific purpose
Unlike stocks and other investment instruments, real estate – even the virtual kind – is a purchase that is often made with the intention of doing something specific with it, such as building a rental unit or a billboard. or create some kind of experience for people interested in interacting with a brand.
For example, Republic Realm – which is called “one of the most active developers in metaverse real estate— bought a large plot of land from Decentraland and built a mall called Metajuku, which was to be a sort of fashion zone. The company has previously leased space in the mall from names such as the financial giant JP Morganwhich set up a “lounge”, and digital fashion brands Dress-X and Tribute Brand.
The buy-and-hold mentality of metaverse real estate owners increases the scarcity of an already limited asset, which can increase value.
2. Interest continues to grow
As more and more people hear about the Metaverse and realize the potential in their professional or social life, more and more is happening there. This is how the metaverse grows. The more content creators add to the various platforms, the more there is to do, the more people show up, the more money people make, the more things that can be funded, and so on. It’s a cycle that begins and ends with investments in metaverse platforms – and right now it’s a massive boom time for them.
From PaneraThe “Paneraverse” planned by — an in-metaverse interactive virtual Panera that will allow real-world food delivered to your home in the metaverse — at Manchester City’s upcoming replica Etihad Stadium, where football fans can follow your favorite players and experience the thrill of a live game, the metaverse is growing explosively. And this explosive growth gives more people more reasons to be there, to spend money there, and perhaps even to invest their own money and time in the space.
3. Metaverse real estate becomes easier to buy in installments
Recently, metaverse real estate developer TerraZero issued its first official metaverse mortgage to purchase a $45,000 parcel in an entertainment district in Decentraland. This is a test case, of course, but with other big financial players like JP Morgan looking for financial opportunities in the metaverse, it may not be long before these loans are easier to come by. and that more people get them.
As more and more opportunities open up, more and more people will feel safer putting their money into the metaverse, when they might be too scared of market volatility to invest in shares. Sometimes belief is all it takes to push a dream forward, and the Metaverse is nothing but a land of dreamers. The more people who think they can afford to invest in the Metaverse, the better it is for its long-term prospects.
Things are looking good, so far
When you look at the prices of basic land in Decentraland or The Sandbox on marketplaces like OpenSea or Non-Fungible.com, compared to major stock indices, it’s obvious that the current stock market correction isn’t influencing prices hugely. virtual real estate.
This does not guarantee that the metaverse will always be a safe haven for investors. Yet for now, interest and, more importantly, belief in the future of the metaverse continues to be strong enough to keep prices relatively stable despite a year that produced some absolutely startling gains in house prices. of the metaverse.
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JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Kristi Waterworth owns Decentraland. The Motley Fool has no position in the stocks mentioned. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.