Digital payments company Square announced at the of 2021 that it was rebranding under the name Block. This was widely seen as a declaration of intent to enter the metaverse and blockchain space.
What are the risks?
Of course, with all investments there are risks in investing in metaverse-related companies.
The technology relating to metaverse is new and developing. Therefore the risks associated may not fully emerge until the technology is widely used.
However, one major potential risk worth bearing in mind is that metaverse-related technology may never be implemented to a scale that provides identifiable economic benefit to the companies included in the theme.
Furthermore, given that the metaverse is still in its infancy, it is difficult to be certain about the regulations that may accompany the growth of this virtual environment.
The application of existing laws may prove to be ineffective, which could mean that courts will be tasked with creating new legal frameworks to govern this relatively unbounded space.
Just as the internet had to endure an online safety revolution, we can predict that metaverse will also face similar challenges. But the impact that these questions, and outcomes, will have on AR remains to be seen.
Bradley Duke is manager of the ETC Group Global Metaverse ETF