Some Analysts Say Metaverse Real Estate Sales Will Hit $1 Trillion in 2022
Facebook Name Switch Sparks Trend
Data shows metaverse real estate spending has exploded since Facebook announced its name change to Meta Platforms (FB) in October of last year. Sales rose above $500 million for 2021 as a whole, but numbers have slowed following November’s $133 million in metaverse real estate sales.
On the pro-growth side, last month’s $85 million in sales represents a 10% increase over January 2021. Analysts say if this year’s sales volume matches that kind of pace, $1 trillion is a realistic target for 2022 overall. Looking ahead, BrandEssence Market Research predicts metaverse real estate sales will grow by 31% each year through 2028.
The Big Three in Metaverse Real Estate
Within metaverse real estate holdings, there are four major entities: Cryptovoxels, Sandbox, and Somnium. Of these, Sandbox is the clear leader, with its holdings representing 62% of available land across all platforms.
Traders explain the challenge lies in determining the value of an asset that has no natural constraint on supply and an unclear future. At present, a dozen outlets sell metaverse real estate and more come online every quarter. The largest transaction to date saw metaverse investment firm Republic Realm purchase a $4.3 million plot of land from Sandbox.
Next Boom Market or Sucker Bet?
Metaverse analysts say digital real estate investing is similar to the real world in that location matters. While this may not exist as a physical location, the nature of the space and what it offers could potentially attract investors: for example, a museum, feature, or attraction that proves popular.
Sandbox, the market leader, has a project called Fantasy Islands that offers boats, jet skis, and villas. Investors say they’re on the lookout for the metaverse equivalent to Rome, Paris, New York City, and San Francisco. Still, a number of analysts urge caution. Some describe metaverse land as similar to a ponzi scheme, adding it could prove comparable to dodgy cryptocurrencies in the long run. The combination of artificial scarcity and uncertainty about metaverse real estate has dampened some investor enthusiasm, but numbers also show market growth.
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