JPMorgan estimates the metaverse to be a $1 trillion market opportunity.
Investment bank bullish on the metaverse
JPMorgan is the latest big fish to turn bullish on the metaverse. The investment banking giant recently released a whitepaper that projects all virtual worlds combined to represent a market opportunity of $1 trillion ($1.4 trillion AUD). The financial services giant that has more than $5 trillion AUD of assets under management did not hesitate to back up its opinion: the bank built a lounge called “Onyx” in the popular metaverse Decentraland.
Managing directors Christine Moy and Adit Gadgil authored the whitepaper and quoted the emergence of new technologies as a key factor that would bring about a “new technological age.” The metaverse is well-positioned to integrate them into an immersive experience, which is why the authors are so confident about their gutsy $1 trillion prediction.
“When you consider the economics of the metaverse, there are potential in practically every market segment.”
JPMorgan identified several big companies already engaged in virtual worlds, such as Adidas, Atari, Gap, Nike, Walmart, and Verizon. Their involvement leads to constantly rising prices for virtual land, which has almost double in price between June 2021 and December 2021. The bank also expects metaverse services that mirror real-world services, such as mortgages, loans, and events to rival their real-world counterparts soon.
What will the metaverse look like?
JPMorgan is not the only bank that has picked up on the enormous opportunities waiting for investors in cyberspace. Other financial players like Grayscale, a digital asset management company, and Goldman Sachs, another investment banking behemoth, forecast similar growth targets. But while all of them have experience in predicting industry growth, they also don’t really know what a metaverse worth $1 trillion will look like.
Plenty of companies like Samsung have already kicked off their own metaverses. But metaverse bulls remain steadfast in the belief that companies will not build the metaverse, but communities will. Going even further, many argue that the involvement of big companies – at least at this early growth stage – is actually hurting metaverse development.
Corporations are naturally profit-driven, and a corporate-built metaverse would probably reflect that. However, that is probably not what the web3 community has in mind when they think of a virtual world that is free, open to all, and offers equal opportunity regardless of your real-world background. Metaverses that are focused on monetising their participants through advertising, paid events, or paid content would essentially only be a fancier version of the 2D internet that we have today.
The way to $1 trillion may anyway be longer than we currently expect. It took Bitcoin almost a decade to reach $1 trillion, although the metaverse arguably has an easier start because it is easier to grasp than Bitcoin. Still, the current metaverse landscape does not reflect the potential banks ascribe to it, so developers have still a long way to go until JPMorgan can hold virtual earnings calls in its Onyx Lounge.
