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Is Investing in Metaverse Risky?

Metaverse may seem like a good starting place to invest. Especially for those who are looking for big gains on their investments. For those, we have to say; it can be risky.

As with any emerging market, the returns and risks are high. If you’re looking to invest in metaverse, you have to keep this factor in mind.

Because if you go with Mark Zuckerberg, you will be tempted to believe that metaverse is the future of humanity. And there’s nothing else that can compete with it. But realistically, we don’t know where all the hype will lead to. Will we leap into a digital world? Or will the metaverse become a part of our world, like Facebook and other technologies?

No matter what happens, one thing remains constant. Metaverse is riding the hype train. This train will slow down for more realistic stations, i.e., the market will mature. Until then, the whole metaverse market is in murky waters.

What do recent trends say?

One way to assess if a market is good for investing is by checking recent trends. The metaverse market has undergone two very different cycles. One where it went up a lot. That happened in 2021 when the crypto market was booming. This coincided with the NFT market boom. But the trend is fairly negative after that. In 2022, we saw the market tumble down quite badly. It hasn’t reached its peak again. In fact, the biggest metaverse coins are down by more than 50% from their peak value. That is alarming, especially if you had invested in metaverse coins.

But that was expected. No one thought that the bubble would continue to rise. It was going to burst, as it did.

So if you’re thinking of investing in the metaverse, you might be at the sweet spot. Rates aren’t that high, demand is relatively low, and a possible bull cycle could quadruple your investments.

Investing in metaverse Land, like that on XANA, could be a game changer for you. The Land is available, the pieces are just right, and the prices will go up once people start flocking. Still, there’s a risk factor associated with all of it. What if the prices don’t rise for quite some time?

Is mainstream adopting metaverse?

Mainstream adoption of any technology is vital to its longevity. A niche market can get so far.

Metaverse may have made strides in the market. But it remains a niche ecosystem that the mainstream audience isn’t quite sure about. They may hear the word “metaverse” and think of Mark Zuckerberg’s Meta. So lack of interest both from mainstream audiences and media is what keeps the metaverse at bay.

Decentraland and The Sandbox, at their peak, attracted hundreds of thousands –maybe millions– of daily users. However, recent numbers paint a different, more depressing picture. Both platforms are collectively attracting just a few thousand users. That’s just a fraction of their glorious past.

Metaverse may be here to disrupt the market. But it is yet to gain adoption like Facebook or other social media platforms. We have seen similar, high-concept technologies fail because they couldn’t break through to the mainstream audience. Google Glass is a prime example. At the time of release, it got so much hype. And yet, it failed to impress the audience.

Is your investment secure?

Metaverse is a haven for scammers. For those looking to scam people out of their hard-earned money. Because payments are virtually untraceable, metaverse could also lead to shady business dealings.

Whatever the case may be, metaverse has yet to address these concerns. Decentralized authority means the rules are few and far between. And it will take some time to devise rules suited to the metaverse.

The FTX crash is one of the bigger examples of investment volatility. People had invested so much in crypto, and all was gone without a trace. The Axie Infinity hack is another example where people lost $600 Million.

What about a few years down the line?

What remains to be seen is how well metaverse technology will be adopted. If the metaverse survives and attracts a mainstream audience, it could be the next big thing. A few logistical hurdles like highly-priced VR headsets, fast internet, and other utilities. Another hurdle is the lack of interest. Without fellow metaverse dwellers, no one wants to wander the virtual worlds yet to become what they promised.

Maybe a few years down the line, the metaverse will gain recognition. Investors, advertisers, and the general audience will spend their time in the metaverse. And then, all the investments could be worth hundreds of times their current value.

All of this is speculation. Do your own research. Check the latest trends. And ask for professional guidance before making any investments.

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