The hot topics of the month continue to be NFTs and the Metaverse. A sharp increase in interest from mainstream players and rise in NFT and Metaverse related trademark applications point to a big year ahead for digital assets and virtual reality.
In February, NFT trading volumes may have pulled back from January’s record highs. Based on news traffic, however, it could prove to be a breather. For the Metaverse, corporations and industries are drawn to boundless opportunities that the Metaverse presents.
Major Names Take to the Metaverse
It’s been an active start to the year for the Metaverse, with some big names entering the virtual world. Last week, Gucci bought LAND in the Sandbox (SAND). This follows McDonald’s and its celebration of the Year of the Tiger. Music giant Warner Music Group bought a beachfront plot in Decentraland (MANA). Following news of Tennis Australia going virtual for the Australian open, even a 4-day digital fashion week is planned for Decentraland.
Considering the level of interest and quick progress to establishing events in the Metaverse, more mainstream players are likely to want to play catchup. The Metaverse removes boundaries, giving access to a global audience.
This week, beauty and lingerie powerhouse Victoria’s Secret joined the growing list of leading brands with Metaverse ambitions.
JPMorgan and a $1 Trillion Price Prediction
JPMorgan has put its money where its mouth is and has also bought land in Decentraland. The U.S investment bank has become bullish on the Metaverse, forecasting a $1 trillion market in a recently released paper.
Titled “Opportunities in the Metaverse” JPMorgan talks of the limitless opportunities that the Metaverse presents. These range from the likes of Microsoft creating virtual workspaces to music artists holding concerts. As a result of the opportunities, the bank sees all types and sizes of companies entering the Metaverse.
Some headline figures from the paper included:
Spending on “in-game ads” to hit $18.41bn by 2027.
Average price of a parcel of virtual land doubled to $12,000 in just 6-months.
There are 200 strategic partners to date with The Sandbox, including Warner Music Group.
Each year, spending on virtual goods sits at $54bn.
Almost 60 billion messages are sent on Roblox each day.
NFTs current have a market cap of $41 billion.
With regulatory scrutiny over NFTs and the Metaverse on the rise, JP Morgan noted that many issues needed addressing, including:
Regulatory, tax, and accounting treatment of Web 3.0 digital real estate / property and virtual world commercial transactions.
Adept navigation of regulatory, tax, and accounting treatment of primarily Web 2.0 virtual worlds with web 3.0 digital assets.
Support virtual worlds that are globally accessible but may have local jurisdictional requirements and rules related to commerce and payments.
Evolution of community governance. (Who sets the rules in the virtual worlds?).
Today’s Virtual vs Tomorrow’s Reality
Considering the above issues and the pace at which corporations are entering the Metaverse, a major regulatory shift is likely. Today, JP Morgan may have a lounge in Decentraland, tomorrow it could be virtual offices. Virtual office space would strip major fixed costs from company expenses. The COVID-19 pandemic and work from home policies proved that organizations can remain a “going concern” without entire workforces “in office”.
Late last year, we reported of more than 1,300 Chinese companies filing for Metaverse related trademarks by mid-December. A few months earlier, the number of filings had stood at just over 100.
This article was originally posted on FX Empire