How to Invest in the Metaverse's $30 Trillion Market

According to one venture capital CEO, the Metaverse could reach a market power of $10 trillion to $30 trillion in as little as a decade.

There are several ways to get in on this hyper-growth and take advantage of the opportunity.

No sector you can think of, no matter how large its market power is today, offers the same market potential as the Metaverse. An opportunity worth up to $30 trillion is sitting at investors' door. (We say this based on information from the venture capital CEO mentioned below)

Put simply, the metaverse is the next iteration of the internet: a 3D virtual environment that will let people interact with their surroundings as much as with each other. This means an entirely new digital ecosystem will be built inside the metaverse.

Does It Make Sense to Invest in the Metaverse?

According to Matthew Ball, CEO of venture capital firm Epyllion, the Metaverse is an opportunity with plenty of zeros behind it. Speaking to Bloomberg News in November, Ball said the following:

"Even if you have far more modest expectations that are comparable to the digital economy, the internet, or mobile internet, it shows that this is a $10 [trillion] to $30 trillion opportunity that will materialize within ten or ten and a half years."

By comparison, cloud computing has been one of the fastest-growing industries for years, and its market size is expected to reach "only" $1 trillion at the start of this decade. That's a far cry from Ball's estimate of up to $30 trillion for the Metaverse between 2031 and 2036. With projections like this, it's no surprise investors are eager to get into this hyper-growth virtual ecosystem.

However, there's no one-size-fits-all way to invest in the Metaverse. Instead, investors have three ways to stake a claim in this potential $30 trillion pie.

What Are the 3 Best Ways to Get Into the Metaverse?

1. Diversify. Diversify. Diversify!

To start, investors can gain Metaverse exposure by putting their money to work in metaverse-focused exchange-traded funds (ETFs). The Roundhill Ball Metaverse ETF, which Matthew Ball helped launch last year, is the undisputed best example in this space.

The idea behind a metaverse ETF is simple: running a virtual space will require a lot (quite a lot) of moving parts. There needs to be computing power to support the metaverse, a network and bandwidth to deliver data, payments to process virtual ecosystem transactions, hardware to let users access these virtual worlds, and identity security to protect digital assets and user identities. Note that this is just a small slice of a massive virtual ecosystem's physical and intangible needs. That means dozens of companies could play a role in supporting the metaverse.

As of February 3, the Roundhill Ball Metaverse ETF has 45 holdings representing seven countries in its portfolio. Most notably, the median market cap of those 45 holdings is $68 billion. While these stocks will have clear Metaverse ties, these companies are also very likely to have highly profitable core businesses that can fund Metaverse research and development. NOTE: This ETF is cited as an example because it appears to be lower risk.

The only small catch here is a net expense ratio of 0.75%, slightly above the weighted average expense ratio for all ETFs. Still, a 0.75% expense ratio isn't too high for the metaverse space.

2. Buy individual stocks with Metaverse exposure

Besides ETFs (exchange-traded funds), a second way to profit from the Metaverse is to invest directly in companies with Metaverse ties.

The advantage of this method is that it lets you give more weight to the companies you think will perform better. Also, since most online brokerages have eliminated commission fees and minimum deposit requirements, there's no fee or commission for buying shares on major U.S. exchanges. So this method can save you a bit compared to buying an ETF.

On the other hand, buying individual stocks requires more upfront and ongoing research. Fortunately, most of the companies involved in the metaverse are already well established.

For example, Microsoft has several ways it can benefit from the metaverse. The company's cloud infrastructure segment, Azure, is already the number two player in global cloud spending. Cloud computing and storage will be necessary to process the mountains of data and information generated in the metaverse.

Microsoft also made waves last month with its all-cash deal to acquire gaming giant Activision Blizzard for $68.7 billion. As of the end of September, part of Activision already had 390 million monthly active users playing on virtual platforms. The Activision deal stood out as another way for Microsoft to bring people into its digital/virtual ecosystem vision, and it looks like the company will keep investing in the Metaverse!

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