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Virtual Growth: The $5 Trillion Potential of the Metaverse

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The following content is sponsored by iShares

Virtual Growth: The $5 Trillion Potential of the Metaverse

Google searches for “how to invest in the metaverse” skyrocketed in early 2022, and then again in early 2023.

This graphic, sponsored by iShares, explores the technology, and potential uses of the metaverse, highlighting its growth trajectory.

The Metaverse, Simplified

The metaverse is an evolving concept that refers to a virtual, interconnected universe. Here, users can engage in immersive and interactive experiences, simulating reality or imagining worlds beyond it.

The metaverse is the next leap forward in global communication and connectivity.
– Omar Moufti, Lead Strategist, thematics for iShares EMEA

It combines elements of the physical and digital worlds and creates a shared space where people can interact with each other and digital objects.

How It Works

In the metaverse, users are represented by avatars that can move around their environment and engage in activities like gaming, entertainment, and even trade.

The world is fueled by technologies such as virtual reality (VR), augmented reality (AR), blockchain, artificial intelligence (AI), and brain-computer interface.

These technologies come together to create a powerful user experience where people can virtually participate in activities like skydiving, swimming with sharks, taking yoga classes, or traveling through space.

Metaverse: Future Potential

With global interest surging, businesses are recognising the metaverse as a catalyst for progress.

In fact, over 80% of commerce could be impacted by the metaverse by 2030, according to McKinsey. It could also contribute $5 trillion to the global economy by the same year.

Additionally, according to a survey of companies that have already invested in the metaverse, nearly 76% of respondents believe it can lead to progress in different forms, like creating new ways of doing business or interacting, as shown below:

What the Metaverse IsShare of Respondents (%)
The future22%
Full of opportunities22%
A new way of doing business17%
A new way of interacting15%
A way of escaping the real world11%
A new distraction7%
Dangerous4%
Useless2%

Furthermore, according to the study, more than 40% of companies believe all businesses should have a presence in the metaverse.

Here is how much different sectors are contributing to corporate investment in the metaverse:

Sector Investing in the Metaverse% of Total Investment
Computer and IT17%
Education12%
Finance11%
Marketing & Advertising10%
Medical & Health9%
Technology & Innovation7%
Travel & hospitality6%
Construction5%
Transport5%
Customer service4%
Manufacturing3%
Food & hospitality3%
Services3%
Creative arts & design2%
Retail2%
Defense1%

The majority of corporate investment is directed towards projects based around non-fungible tokens (NFTs), cryptocurrencies, and enhancing work environments.

The Investment Opportunity

Investors can explore various avenues to tap into the vast potential of the metaverse, such as taking a look at the following opportunities for their portfolios:

  1. Companies participating in the creation and management of the metaverse, including those developing VR and AR technologies, 3D modeling software, and blockchain technologies.
  2. Companies leveraging the metaverse for diverse applications, including gaming and entertainment, office work, and healthcare.
  3. Companies with a strong brand presence and/or user base in the metaverse.

While the metaverse, like any emerging technology, carries risks, its opportunities are compelling to forward-looking investors looking to tap into the next big technology megatrend.

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To take advantage of the long-term opportunities in the metaverse, explore the BlackRock & iShares Thematic suite now.

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