• ETF Insights

    Metaverse and the future of investment

    Martijn Rozemuller, CEO – Europe

    As 2021 draws to a close, the Matrix Resurrections will be released in the United States, the fourth in a dystopian saga chronicling a world trapped in virtual reality. Little more than 20 years on from the 1999 launch of the first Matrix film, though, it seems closer than ever to the way our world is unfolding.

    Indeed, the US tech giants are already staking claims to what they dub the ‘metaverse’, a digital world where your digital avatar interacts with others – whether working, playing, learning, exercising or shopping. They see it as the future of the internet: the ultimate way of fulfilling people’s basic needs for convenience.

    For a vote of confidence look no further than Mark Zuckerberg, chief executive of Meta (formerly known as Facebook), who is staking everything on this virtual world. “Our hope is that within a decade, the metaverse will reach a billion people, host hundreds of billions of digital commerce, and support jobs for millions of creators and developers,1” he said.

    When Metaverse fantasy becomes reality

    Already, the augmented reality market is forecast to grow by 43.8% a year until 2028, according to Grand View Research, Inc.2 That’s partly driven by the growth in games that transport people to a virtual world, as well as the use of virtual reality in industry and manufacturing.

    Another dimension of tomorrow’s virtual world is the smart home. By 2022, 63 million American homes will qualify as smart, as forecast by the Swedish research firm Berg Insight.3 They will have everything from internet-connected sensors that monitor health to cameras that watch over pets from the office.

    Behind this emerging virtual world are the semiconductors that form its nervous system, and the crypto assets that will become its real estate and currency. All of the tech devices that power virtual reality rely on semiconductors, while crypto assets are likely replacements for real ones.

    ETFs for the metaverse

    At VanEck, we firmly believe that the virtual world will quickly grow, although as a force for good rather than the world depicted by the Matrix quartet. Aligning our vision with the tech tycoons, we have recently launched ETFs tracking the smart home, digital assets, semiconductors and video gaming.

    At the end of each year, it’s traditional for investment firms to make predictions for the coming year. Mine is far more ambitious, stretching over the next decade. During this time, I can confidently forecast that reality will become more virtual, and the tech companies that engineer this future will prosper accordingly. In my view, though, this future will be more utopian than dystopian, as virtual reality improves our way of life!



    3Swedish research firm, Berg Insight. https://time.com/5634791/smart-homes-future/

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