BUILDING a virtual real estate portfolio could be the next big thing for investors who aren’t afraid to take a chance on the new technology.
Here are three reasons to ‘buy to dip’.
What is metaverse real estate?
Metaverse real estate is parcels of land in virtual worlds.
The parcels of land are programmable spaces where people can socialize, play games, sell NFTs, attend meetings and more.
With the rise of the metaverse, digital real estate is expected to increase in value over the next decade.
How much is real estate in the metaverse worth?
When Decentraland held its first LAND auction in December 2017, a parcel of land cost only $20.
But after Facebook rebranded as Meta in 2021, those same parcels sold for over $6,000.
By the start of 2022, the prices had skyrocketed to over $15,000 per LAND token, before crashing to around $2000.
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How and where to purchase virtual real estate
Your ownership of a piece of land is a unique code on a blockchain.
This code certifies your ownership and rights.
To start your metaverse real estate portfolio, you need a digital crypto wallet.
Then, head to the virtual metaverse platform and create an account.
You’ll need to link your digital wallet to the platform to buy land and other assets.
Choose a parcel of land and purchase it.
You can also purchase metaverse land through 3rd parties, however, the sellers don’t need licenses and are under no regulations.
The majority of metaverse real estate is owned in Decentraland, Sandbox, Somnium Space, and Cryptovoxels.
Just like in the real world, location is key when choosing virtual land in the metaverse.
If you plan on investing in metaverse real estate, look for areas that have the potential for development, along with places where people can socialise.
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Three reasons to buy the dip
Although the metaverse is expected to grow in the coming years, it’s still far from stable.
But here are five reasons buying the dip could be worth the risk.
1) Virtual land rentals are still in demand
Despite the dip in prices, property construction is continuing with companies like Pepperidge Farm, Snapple, and Jose Cuervo starting metaverse-based projects in the last couple of months.
LandVault owner Sam Huber, a virtual property developer in the metaverse, said his company rents developed properties for upward of $60,000 per month, with up to 70 per cent profit.
2) The metaverse could be worth $2.5 trillion by 2030
Big brands like Facebook, now Meta, Sony, and Microsoft have heavily invested in the space and are transforming their businesses into metaverse enterprises.
According to Bloomberg, the metaverse industry could be worth $800 billion by 2025 and $2.5 trillion by 2030.
So despite the recent lull, analysts do believe the industry will grow rapidly over the next decade.
3) Promote a brand or business
If you have a business or brand that appeals to Generation Z (people between 10 and 25), the metaverse could be a way to connect with them.
Companies can use virtual land and real estate to host virtual events, do traditional advertising or offer unique client experiences.
Big brands have already hosted virtual events and paved the way for the virtual concerts and festivals of the future.
Adidas for example bought a plot of land in The Sandbox and hosted events, such as GamesBeat Summit 2022, on it.