A gung-ho investor claims to have dropped thousands of dollars on a plot of virtual land.
Writing for the Singaporean website StackedHomes last month, the cash-flushed risk-taker explained their reasoning for apparently dropping $14,000 on real estate in the metaverse.
The writer, known only as Cheryl, believes that investing in metaverse property has advantages over real-world property – though it comes with its own risks.
The metaverse is a loosely defined virtual realm made up of connected 3D virtual worlds where people can work, play or do business.
Visitors to the social spaces can buy goods and services, such as property, much like they would in the real world.
And while that largely takes the form of a few square meters of space that fetch a small fee, prices can go into the hundreds of thousands.
Vast metaverse estates are fetching big prices as investors buy up land where they can build virtual casinos, malls, homes and more.
Traded in cryptocurrencies, they are owned as NFTs. Much like with real property, owners splash out in the hopes they’ll be worth more in future.
However, just like their real-world counterparts, the value of the plots can go up or down. They are considered a risky investment.
Cheryl wrote: “For me, digital real estate and the metaverse will be playing a major role in how humans communicate, transact, and interact.
“As such, buying digital real estate in the metaverse is like putting your stake into the next wave of technology, commercialism, and ways of socializing.
“It is pretty much like buying real estate in a country. Just that this country is a digital one, and people are not really living inside it.”
The mysterious investor claims to have spent $19,000 SGD ($14,000) on a plot of land in the Decentraland metaverse.
They say they hope to in future rent it out to businesses or place advertising on it to make a bit of extra cash on the side.
After walking readers through the process of buying their own Decentraland property, the investor gave a word of warning.
“I have to remind you guys to ensure the authenticity of your purchase – scammers are everywhere, so beware.”
Like any investment, there’s also the risk that it will LOSE value.
It may have experienced something of a boom, but following months of rising prices, metaverse property prices appear to be taking a tumble.
According to analytics company Meta Metrics, the average price of metaverse property dropped 18 percent in March.
That’s in stark contrast to the preceding six months when prices rose nine-fold. Sales in January topped $85million.
However, despite the dip, things are still looking rosy for investors.
Land pricing was still four times higher in March than it was a year earlier when properties were going for $2,131 on average.
It’s unlikely that the blip will curb sales as interest in the industry grows.
Sales of virtual real estate topped $500million last year and could double this year, according to analysts and investors.
So far, metaverse real estate sales have been concentrated on the “Big Four” – Sandbox, Decentraland, Cryptovoxels and Somnium.
It’s likely that other sales booms will sweep the industry in future as new metaverses become the flavors of the week.
This article originally appeared on The Sun and was reproduced here with permission.