Metaverse
Metaverse Returns vs S&P
-12.00%
Versus S&P
•
31 minutes ago
-12.00%
Versus S&P
•
31 minutes ago
6m High
6m Low
Metaverse
54.83
21.27
S&P 500
5,762.48
5,186.33
Metaverse
S&P 500
Does not follow the stock market
Sources: Metaverse Index, SPX
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In the Market
Check out the Metaverse in the stock market
Highlights
Good For
High risk, high return + passive income
Time Horizon
1-5 years
Earnings from
Asset appreciation (crypto, NFTs) and rental income (virtual land)
Diversification
Environmentally Friendly
The metaverse is set to explode as part of Web 3.0—the next iteration of the internet where users, rather than companies, will own the underlying protocols. At its peak, The Metaverse Index (MVI) saw a 6,211% ROI since launch. However, historical data shows that Metaverse tokens are still very volatile during market crashes. Investors looking for less volatile options could buy into publicly-traded tech companies that are entering the Metaverse (e.g. Roblox, Meta, Microsoft, Nvidia).
Did you Know
The term “metaverse” was coined by science fiction author Neal Stephenson in his 1992 novel Snow Crash.
Meta’s Oculus Quest 2 VR headset sold 8.1 million units in 2021, narrowly outselling the Xbox gaming console. Analysts are predicting that this achievement foreshadows the coming dominance of ARVR.
Web 3.0 & NFT fundraising totaled ~$1 billion in 2021. This figure doesn’t factor in the tens of billions of dollars being invested in metaverse development by Web 2.0 companies like Meta, Microsoft, NVIDIA and Epic Games.
Considerations
The metaverse is a set of interconnected, 3D virtual worlds where we may all work, play, socialize and invest in the near future so getting in now could get you some early adopter benefits.
Between opportunities for advertising, social commerce and virtual events as well as hardware firms, developers and creators, the total potential market for the metaverse currently tops $1.2 trillion.
Everyone from celebrities like Snoop Dogg to tech giants like Meta (formerly known as Facebook) are joining the metaverse.
Reasons to Invest
The metaverse is highly speculative as there’s little infrastructure and user adoption at present.
Metaverse tokens are vulnerable to pump and dump schemes and market crashes.
Lack of regulations means users are exposed to a higher risk of rug pulls and crypto hacks.
Drawbacks
Performance During a Recession
While Bitcoin was created in response to the financial crisis of 2007-2008, cryptocurrencies only started going mainstream years later. For this reason, experts are uncertain how crypto will fare during a major recession. On the one hand, metaverse tokens might go up in price if many individuals transfer their money over to scarce virtual assets during a recession. But on the other hand, high-risk assets are among the first investments to be sold when a recession kicks in.
How You're Taxed
Income Tax
Capital Gains
In the U.S., cryptocurrencies are taxed as property. The exact rates depend on how long you’ve held onto your crypto—if it's one year or less, profit is considered income, but if it's over a year, your profits are considered capital gains. Capital gains tax—which ranges from 0% to 20% depending on your tax bracket—is only due when you’ve sold your crypto and realized your gains. Income tax, on the other hand, is due when you’ve been paid in crypto, including compensation, incentives, airdrops, mining and staking rewards. Officially, the IRS has not formally designated whether NFT sales should be taxed at the capital gains or collectibles tax rate. But as a rule of thumb, NFT sales are subject to capital gains tax.