The hype on blockchain tech may be real after all. According to Morgan Stanley they are reporting that the metaverse is estimated to be an $8 trillion market. That is right trillion with a T. The idea is taken due to the expected mass adoption of crypto, metaverse and blockchain technologies. As discussed, many web3 products such as NFTs are a hot topic right now and the attention they have gotten throughout varies social platforms is astonishing. Of course a lot if this web3 NFT fluff could be a bubble waiting to burst. This news has to spark excitement within the web3 community. A massive new industry is emerging and it could be set to create new wealth like never seen before. I mean, just look at the crypto markets. While they may not be off to the best start in 2022, there is no doubt that many have created enormous wealth in just holding crypto and a lot of this has only been within the last couple years. Of course the same thing is happening with NFTs, but that is another story.
Where could capital be deployed?
While there isn’t a clear idea of where exactly VCs, and all like-minded investors are looking to bet their money, one thing is for sure and that is that blockchain, crypto and web3 are filled with diverse industries ready to be disrupted. There is a great amount of capital flowing in an some VC
the safekeepers of crypto assets are attracting billions of dollars from investors betting that the influx of Wall Street players into digital markets will lead to a surge in demand for custody services.
Fireblocks became the highest valued crypto asset custodian on Thursday after raising $550m in a new funding round that put an $8bn price tag on the company. The figure matches the valuation achieved by FTX, one of the world’s largest crypto trading exchanges, which announced a $400m funding round on Wednesday.
Fireblocks has secured new investment from a group of venture capital companies, including D1 Capital Partners and Spark Capital. The deal comes after private investors ploughed $4.5bn into digital asset custodians last year, representing a fifth of total capital that flowed into the blockchain industry in 2021, according to research by Blockdata.
The inflow of capital comes on the back of expectations that large professional investors will grow their presence in the digital asset space, fuelling a market for lending, borrowing and other trading activities that require crypto tokens and coins to move around safely.
Investors have also been pouring money into the broader blockchain industry, as the abundance of private capital makes its way into the rapidly growing industry.
Custody is a key service for professional investors to be able to access digital markets, and total assets under custody grew rapidly in the past few years to stand at $223bn in January this year, according to Blockdata.
Crypto custody providers initially focused on safekeeping and storing assets such as bitcoin. But as the market has developed, custodians have evolved to act as security guards for assets moving around in the digital world, protecting coins and tokens from hackers, and ensuring that funds are safe and get to where they need to be.
Coinbase and PayPal are just two of the companies that have acquired custody service providers recently, as part of an expanded offering for professional investors.
VCs see the Metaverse as a trillion dollar oppurtunity
- Crypto giant Grayscale said the metaverse is a $1 trillion annual revenue opportunity.
- It comes as pieces of virtual land inside metaverse projects have sold for upwards of $2 million.
- Grayscale said the metaverse is a big opportunity for the crypto world, with investment accelerating.
The metaverse has the potential to become a $1 trillion annual revenue opportunity across the worlds of advertising, digital events, e-commerce and hardware, according to a new report from crypto giant Grayscale.
Grayscale’s report, released Wednesday night, comes during a surge in interest in the metaverse after Facebook officially changed its name to Meta as it focuses on the virtual immersive world it says is the future of the internet.
This week, there have been early indications of the potential size of the metaverse economy, with parcels of virtual land inside crypto-based metaverses Decentraland and Axie Infinity selling for more than $2 million.
The metaverse refers to a range of online 3D virtual environments, in which people can play games, build things, socialize, work and even trade and earn crypto assets.
The most well-known individual metaverses right now are in gaming, with Fortnite and Roblox booming in popularity over the last few years. Grayscale estimated that revenue from virtual gaming worlds could grow to $400 billion in 2025, from around $180 billion in 2020.
Yet Grayscale, which runs the world’s biggest cryptocurrency fund, said the metaverse is still “in its early innings.” It said Facebook’s plans to spend $10 billion this year on the metaverse is a sign of the potential of the market.
“The market opportunity for bringing the Metaverse to life may be worth over $1 trillion in annual revenue,” the report said, although it did not specify a timeframe.
The report’s authors, Grayscale’s head of research David Grider and research analyst Matt Maximo, argued the metaverse is a huge opportunity for crypto companies.
Many current metaverse projects, such as virtual realities or games, are run by so-called Web2 companies, which are centralized and operate for profit. Facebook, which has launched the virtual reality space Horizon Worlds, is an example.
But increasingly, metaverse projects are created on or are heavily tied to crypto technology, which can give users more control and allow them to earn money that they can use in the real world. This is known as the Web3 metaverse.
Grayscale listed the opportunities for monetization of consumers within the Web3 metaverse. These include art galleries launching NFTs, games and casinos where players win crypto, digital advertising billboards, and music venues where DJs and artists hold concerts.
In the third quarter, total Web3 and NFT fundraising hit $1.8 billion, out of overall crypto fundraising of $8.2 billion, Grayscale said. It added that investment has “recently started to accelerate.”
Grayscale’s report focused on Decentraland. In that metaverse, people log in to play games, earn the native cryptocurrency mana, purchase NFTs including virtual land and collectibles, and vote on the governance of the economy.
The crypto investment company recently created a Decentraland trust that invests solely in mana. The cryptocurrency is up around 550% in the last 30 days, according to Coingecko.