Top ten metaverse platforms have already sold virtual real estate worth $1.9 billion dollars, according to MetaMerics Solution. It is predicted that by 2026, virtual estate worth of $5.4 billion will be sold. It is great investment opportunity for young investors to cash in the market. However, potential investors needs to be very cautious and understand some factors before making investment. Like physical real estate investment, virtual real estate has some key stakeholders - owner, developers, buyer and sellers. However, the main difference in stakeholder-ship of virtual real estate does is the lack of regulatory authority.
Some factors to consider when investing in Metaverse virtual land:
Diversification strategy: All in one basket investment is very unwise for virtual real estate market. This is because of the nature of volatility of virtual real estate. Hence, it is prudent to make combination of physical assets , virtual, Defi etc. Successful investment portfolio entails asset diversification. Diversifying your portfolio not only lowers the risk but also has the potential to maximize returns, as proceeds come from various sources, which might perform differently at different times. In addition, Investing in virtual real estate is still relatively affordable.
Volatility and unpredictability : At the moment, investing in virtual assets is very risk and volatile. Virtual markets is also unpredictable. There are no enough historical data to build algorithms. Hence, investment should be done based on intuition and experience of the investor.
Lack of regulations: There is no regulations that governs virtual assets. As the market matures, we can expect to have regulations which provides protection to investors.
Cybersecurity and malware: Cyber attacks can deplete all of investments in one go. It is also very difficult to track the hackers because of the nature of underlying technology.
Technical Knowledge: To Purchase virtual lands, first you need to to set up wallet. Then, you need to access an NFT marketplace, to identify parcels of land - based on prize, location and size etc. Once you identify the required land, you need to connect your digital wallet to the platform before you can buy the digital asset. You will receive your virtual land as an NFT.
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