If you're into investing, then there's a good chance you've heard about the metaverse at some point over the past few years. This new 3D virtual world and the digital assets like non-fungible tokens (NFT) that can be bought and sold on its multiple platforms have quickly taken the tech world by storm.
Huge corporations are pouring money into it, and many say early adopters who are investing now will see big returns as a result. While the metaverse very well could become something big, here are three reasons I'm still not investing.
I doubt the mainstream will adopt
The metaverse isn't a new concept. For decades people have dreamed up such virtual worlds, ones that would allow its users to live a life without limitations, buying things, connecting with old and new friends, getting married, renting real estate, or traveling to far-off places from the comfort of their computer chairs. But up to this point, none of these worlds have stuck, seeing long-term mainstream adoption. Eventually, interest fades as people get caught up in the demands of the real world.
Why would the metaverse be any different? Some argue that advancements in technology over the past decade have improved how people experience virtual reality. Things like augmented reality (AR) headsets definitely make it feel as if you're actually living and experiencing this alternate world. Yet I don't think new technology alone will be able to make this go mainstream. We all have a lot of demands in the real world that leave us with little time to carry out a life online.
Despite companies increasing their investments in the metaverse, public interest seems to be waning. Surveys show that as many as 68% of respondents have little or no interest in the growth of the metaverse, and as many as 78% think it's just hype. Google searches for the term "metaverse" are also one-fifth of what they were during peak traffic in 2021. There are also only around 50,000 active users in Web 3.0, the decentralized internet that supports the metaverse, which is a shockingly low number given the amount of money being poured into it.
I don't agree with its vision
One of the great aspects of investing is being able to put your money into companies that align with your morals or environmental and social values. The metaverse very much goes against what I believe in. Bitcoin mining, blockchain technologies, and virtual worlds require a lot of energy to operate, which isn't great for the environment. The Bitcoin Energy Consumption Index estimates that a single Bitcoin transaction consumes as much power as the average U.S. household does in almost 75 days. Many companies involved in these technologies are working toward net-zero carbon emissions, but at the moment, the metaverse is totally unsustainable.
I have social concerns, too. The metaverse is valued at $47 billion today, and if adoption continues as proponents hope, it could be valued at as much as $800 billion by 2024. That's a lot of money that could be invested in technologies that could advance or improve our physical world today. There's certainly no shortage of issues plaguing our country that $47 billion could do a lot to alleviate, such as the lack of affordable housing.
I'm not personally a huge proponent of gaming or virtual reality to begin with, so advocating for a wider adoption that includes more screen time and less interaction with the real world is definitely not something I can wholeheartedly get behind. I know my values aren't everyone's, but it's one of the reasons I'm still not investing.
It's not worth the risk
An investment in the metaverse is only as valuable as the demand for the technologies involved. The NFT or piece of virtual land you bought may be worth something today while the hype surrounding the metaverse is very real. But if interest falters, you could be left high and dry with nothing to show for it.
There are countless companies, like real estate investment trusts (REITs), that play a critical role in the operation of our real world and carry much less risk than the metaverse. While I may not achieve the same growth the metaverse may offer in the future, I'm also not risking all my money on a very speculative play.