The likes of Gucci, Balenciaga, and Burberry are spinning up fashion and accessories that you'll never even wear | Source: Rad Mora

Metaverse Opportunities Worth US$1 Trillion, According to JP Morgan

Initially shrouded in scepticism, the metaverse is looking increasingly more like a lucrative opportunity.

According to a report from banking giant JP Morgan, opportunities in this new online world could total US$1 trillion.

Titled ‘Opportunities in the metaverse‘, the report delves into “how businesses can explore the metaverse and navigate the hype vs. reality” – a very real predicament faced by today’s big brands.

The metaverse will likely infiltrate every sector in some way in the coming years, with the market opportunity estimated at over $1 trillion in yearly revenues.

JP Morgan

The American company is far from the only one making this prediction. Many Wall Street rivals are also proposing the same optimistic outlook.

Investment bank Citi released a report in early April pitching the metaverse’s money-making potential at between US$8 and $13 trillion by 2030, supported by as many as five billion users.

Bloomberg Intelligence believes the metaverse market could reach nearly US$800 billion per year in 2024 – and that’s not taking into account the second half of the decade.

Another banking juggernaut, Morgan Stanley, reported last year that the non-fungible token (NFT) market, one aspect of the metaverse, is set to reach US$337 billion by 2030.

Beeple’s Everydays: The First 5000 Days, is the most expensive NFT ever sold | Source: Pinterest

The recent growth of the digital realm is no secret – plenty of companies, brands and individuals are tapping into the potential gold rush. As the JP Morgan report notes, “companies of all shapes and sizes” are entering the metaverse, not just tech-savvy start-ups. 

The report coincides with JP Morgan becoming the first bank to open in the virtual world. In February, it set up shop in Decentraland – one of the world’s most popular metaverse platforms.

JP Morgan metaverse lounge | Source: Bitcoin News

They’re a little behind the curve, however, seeing as numerous luxury brands have already realised how the Metaverse could be the next lucrative market.

Over the last year, companies from a range of industries have claimed stakes in the virtual world. Whether that’s fashion powerhouses such as Balenciaga, Burberry, Louis Vuitton and Gucci, or sporting icon Nike’s RTFKT acquisition and Adidas’s NFTs.

Luxury car companies are also driving into digital – McLaren partnering with InfiniteWorld and Lamborghini’s last ever Aventador NFT.

The billion-dollar NFT art space is another thriving market where artists are creating pieces that will never exist in the physical world (or will exist in the physical world alongside a blockchain-recorded proof of authenticity). Leading auction house Sotheby’s now has its own NFT Marketplace, created as ‘an immersive destination for collectors of digital art’.

Source: Sotheby’s

Aside from the common NFT forms of a video, a digital art piece or collectible, there’s another growing metaverse avenue for investors to explore.

While physical world real estate has long been the backbone of many investment portfolios, virtual land could be the next hot property. According to a UBS report, “investment firms are investing millions in virtual real estate across a number of virtual worlds such as Decentraland and Sandbox”.

Blockchain-based game, The Sandbox, allows players to buy and sell digital assets including real estate.

Rapper Snoop Dogg boosted the virtual real estate market in September last year when he Tweeted he was ‘entering the Metaverse’ through a partnership with The Sandbox.

The JP Morgan report mentions luxury brands are also “buying up space so they can create virtual stores and other experiences” with virtual land doubling in price from June to December last year.

This year Gucci also purchased metaverse land via The Sandbox and is planning to create an “interactive fashion experience” for its consumers.

While it’s still relatively early days, time moves fast in the metaverse. As we accelerate towards ‘Web3’ and a world mediated by virtual reality, it’s becoming increasingly more enticing for companies to tap into these ‘metaverse opportunities’, sooner rather than later.

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