Trillion-dollar VR market Metaverse investments’ opportunities and risks.

The metaverse industry is rapidly expanding, with both established and emerging players competing to claim a share of the potentially trillion-dollar market. According to Cointelegraph Research’s VC database, nearly $2 billion was invested in blockchain-based metaverse deals in 2022.

A 2022 report by McKinsey estimated that the metaverse industry could generate up to $5 trillion in revenue by 2030. However, Citi’s forecast of $8 to $13 trillion surpassed this estimate. These projections indicate significant growth from the $65.5 billion global metaverse market recorded in 2022. To achieve these optimistic forecasts, the metaverse industry would need to maintain an impressive 85% compound average growth rate.

Cointelegraph’s 2023 Ranking of Metaverses revealed that a blockchain-based metaverse with over $61 million in value locked in its smart contracts and over 8,000 monthly users was the winner. This project enables true ownership of in-game assets and has a deflationary token model. To learn more about it, read the report now and download it from the Cointelegraph Research Terminal.

Stronger than ever

Despite difficulties, market leaders such as Microsoft, Apple, Nvidia, and Qualcomm are developing their metaverse strategies. Apple’s entry into the metaverse is highly anticipated with its AR/VR headset launch scheduled for June 2023. Similarly, gaming firms like Epic and Roblox took advantage of the pandemic lockdown and successfully launched metaverse concerts that reached millions worldwide.

In 2022, mergers, acquisitions, and financing in the metaverse realm rose from $13 billion in 2021 to over $120 billion, bolstered by Microsoft’s $69 billion acquisition of Activision. This deal had a 7.6x EV/Sales multiple and a 20.2x EV/EBITDA multiple. Although valuation multiples are expected to decrease in line with higher interest rates, investment activities remain robust.

The top blockchain metaverse projects attracting significant capital include The Sandbox ($1.02 billion), Decentraland ($905 million), and Axie Infinity ($830 million). The Sandbox’s year-to-date (YTD) performance is 44%, and Decentraland’s YTD is 62%. However, neither of them surpasses Bitcoin’s YTD return of 68%.

For investors seeking exposure to the metaverse, ETFs like the Fidelity Metaverse ETF (FMET) and Roundhill Ball Metaverse ETF (METV) offer viable options. However, the new Cointelegraph Research study reveals that a majority of token transactions in metaverse projects result from speculation rather than actual in-metaverse usage, a trend that calls for cautious investment.

The Cointelegraph Research team

Cointelegraph’s Research department comprises some of the best talents in the blockchain industry. The research team comprises subject matter experts from across the fields of finance, economics, and technology to bring the premier source for industry reports and insightful analysis to the market. The team utilizes APIs from a variety of sources in order to provide accurate, useful information and analyses.

The opinions expressed in the article are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific security or investment product.

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