Grayscale Claims the Metaverse Is a $1T Opportunity in a New Report
Grayscale Investments, a renowned crypto investment firm, believes the metaverse has the potential to become a trillion-dollar industry over the next few years. The company shared this bullish outlook on the metaverse through a report dubbed The Metaverse, Web 3.0 Virtual Cloud Economies. Grayscale’s Head of Research David Grider authored the report alongside research analyst Matt Maximo.
In the report, Grayscale noted that crypto cloud economies are the next emerging market investment frontier, and the metaverse is leading this Web3 internet evolution. The company based its views on open metaverse worlds powered by an interconnected crypto economy. It gave the example of Decentraland.
The report points out that projects like Decentraland are creating an open-world metaverse where users log in to play games and earn MANA, Decentraland’s native token. Users can then use this token to purchase NFTs or vote on governance. Through these features, Decentraland offers users real-world interoperability and value for the time they spend in the game.
Increasing metaverse adoption
Per the publication, the metaverse’s potential has already started wooing prominent web2 companies. An example is Facebook, which recently rebranded to Meta and announced its metaverse ambitions. Per Grayscale, this serves as a tipping point that will see other mainstream companies start venturing into the metaverse to stay competitive.
With mainstream firms rushing to secure a piece of the metaverse pie, the investment company believes the value locked in the sector will surge astronomically. Grayscale also analyzed data of metaverses that have been active since the start of 2020 and found that the user base has grown tenfold. As of June 2021, the number of active wallets stood at around 50,000.
Commenting on this growth, Grayscale said,
“Compared to other Web 3.0 and Web 2.0 segments, Metaverse virtual world users are still in their early innings, but if current growth rates remain on their current trajectory, this emerging segment has the potential to become mainstream in the coming years.”
The report further stressed that many venture capitalists are eyeing the space, adding that blockchain gaming secured $1 billion worth of funding from various investors. This figure represents 12% of the funding that entered the crypto space within the three months ending September 30.
To this end, Grayscale believes that,
The market opportunity for bringing the Metaverse to life may be worth over $1 trillion in annual revenue and may compete with Web 2.0 companies worth ~$15 trillion in market value today.
Multiple factors could fuel the growth of the metaverse
According to Grayscale, multiple factors could back explosive growth in the metaverse. These include an increase in the average leisure time and funds spent on digital hobbies, as well as a cultural migration from premium games to free-to-play and play-to-earn versions.
With the virtual gaming sector raking in $180 billion in 2020, Grayscale estimates that the industry could net over $400 billion by 2025. The company’s prediction is based on the fact that the gaming world is rapidly shifting from web2 to web3 because of the play-to-earn potential that the latter presents.
This shift is evident in the prices of metaverse-related coins like MANA and The Sandbox (SAND). At the time of writing, MANA is trading at $4.84 after gaining 42.91% over the past seven days. SAND, on the other hand, is up 63.51% over the past week to trade at $6.81.