That word has been everywhere this year. Facebook changed its name to Meta, a move met with a healthy dose of skepticism and even some scorn. The Collins Dictionary declared NFT (short for non-fungible token) its word of the year — and such tokens form a key part of the burgeoning virtual universe.
Everyone from gamers to developers to diplomats seem eager to get into the metaverse before this version of the future arrives.
If the future is the metaverse, should you have a financial plan for it? Rare will be the mainstream adviser who tells you to drop $1.5 million on a few plots of digital land. And the jury is still out on how and if the metaverse can even take shape.
But as we wind down this year of meta mania, it would be prudent at least to have some sense of the ways this new means of working, playing and investing might affect your budget. Or at least you’ll know what to say when someone in your family inevitably asks over the holidays: “What is the metaverse, anyway?”
Investments in Digital Assets: A virtual universe creates virtual investment opportunities. Digital land prices are booming. Republic Real Estate, a firm that has raised money to buy distressed condos in the physical world, launched a fund earlier this year aimed at investors seeking to buy virtual land.
The venture plans to purchase parcels across several online “metaverses” and develop them into virtual hotels, stores and other uses, with the goal of increasing their value among cryptocurrency enthusiasts.
Of course, NFT art has become one of the buzziest digital assets this year. And Thomas Olsen, a partner at Bain & Co., recently said he sees all assets being tokenized 20 or 30 years in the future. “All equities, all bonds are going to be on a digital asset platform that is being built by the crypto experiment today,” he said.
Online-Only Shopping and Experiences: Online shopping will get even more complicated if brands have their way. They are already making millions of dollars selling clothing and accessories that exist only in the metaverse.
It might seem silly now, but the way you look online could start to matter a lot more if much of your work and play take place there. That is why it will be important to keep track of how and why avatars of different races and genders get priced online. The disparities are already starting to show up, and the implications could be serious.
Remote Work to the Extreme: Telling someone that they needed to prepare for the internet to disrupt their industry might have sounded ominous and even silly in 1990, but certainly not in retrospect. Could the same hold true for the metaverse?
The meta modus operandi could make remote work more permanent and immersive. Facebook wants to bring its version of the office to the virtual world, but so too does the big kahuna in workplace technology: Microsoft.
A version of Microsoft’s Teams chat and conferencing program that features digital avatars is in testing now and will be available in the first half of 2022. Customers will be able to share Office files and features, like PowerPoint decks, in the virtual world.
Shifting Circumstances in the Real World: None of this is to say that the real world is going to disappear anytime soon. (Although sometimes it feels that way.) As cryptocurrency, gaming, work and everyday life combine, though, firms will continue to adapt in the real world.
One example: We might start to see companies change locations to real-world jurisdictions viewed as more friendly to the virtual one. That already seems to be happening in Puerto Rico, whose low taxes have been attracting the crypto crowd in droves. If the metaverse’s bankers want to gather in San Juan, fine. But I’ll be scheduling interviews with them at the beach, not online. — Charlie Wells
P.S. We’ll be taking a holiday break over the next two weeks. We here at Bloomberg Wealth wish you a safe and happy festive season and thank you for reading this year. See you in your inbox in 2022!
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