- The metaverse is a massive opportunity for the crypto space, according to a Bank of America strategist.
- BofA’s Haim Israel predicted that cryptocurrencies will finally be used widely for transactions in virtual worlds.
- He said crypto-based platforms will need developing, creating “a big opportunity for this entire ecosystem.”
The metaverse is a massive opportunity for blockchain technology, and it will finally cause cryptocurrencies to start being used widely for transactions, according to a strategist at Bank of America.
Haim Israel told Insider Tuesday that the metaverse is likely to drive a boom in development in the crypto world, as people race to create virtual-world platforms.
“I definitely believe this is a massive, massive opportunity,” the head of global thematic investment strategy at BofA said. “You need the right platforms … that is definitely going to be a big opportunity for this entire ecosystem.”
Israel predicted that the metaverse is where “we’re going to start using cryptocurrencies as currencies.” But he said existing digital currencies are likely to prove too volatile for this, and so some types of stablecoins will probably come to dominate.
The metaverse is a catch-all term referring 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.
Interest in the metaverse has soared after Facebook said in October it would change its name to Meta, to signal its commitment to building out its own platform. Big companies and crypto developers alike are racing to build digital worlds.
One popular platform, Decentraland, uses decentralized crypto technology to enable users to buy virtual plots of land, build their own structures, and vote on the governance of the economy.
A parcel of real estate on Decentraland recently sold for $US2.4 ($AU3) million, as fans turn to digital properties and land as a speculative investment. Republic Realm paid $US4.3 ($AU6) million for a property in The Sandbox metaverse on Tuesday.
BofA’s Israel said it looks as though the metaverse will be where people finally start widely using cryptocurrencies for transactions.
The idea is that cryptocurrencies go hand-in-hand with the blockchain technology underpinning some of the new virtual worlds. That allows metaverses to remain decentralized, rather than under the control of tech companies or payment providers.
Yet Israel said many digital currencies are far too volatile to become used widely for transactions. That means metaverse developers are likely to turn to stablecoins, which are pegged to stable counterparts such as the US dollar.
The BofA strategist predicted that traditional payments companies will become much more interested in cryptocurrencies, if they become widely used in the metaverse. “I see a lot of collaboration between the two,” he said.
While excitement around the metaverse has grown, many people are more skeptical. They point out that virtual worlds have been around for decades — Second Life, for instance — and that virtual-reality headsets have never really taken off.
Others question whether cryptocurrencies really will gain wide adoption, and are not sure that tech giants like Facebook won’t end up dominating whatever the metaverse turns out to be.
“I am not convinced the metaverse will be user-owned or decentralized if it is developed by Meta, Microsoft, Apple, etc. (which is where $US10B’s are being spent to develop it!),” Ben Gilbert, venture capital executive at PSL, tweeted earlier this month.
Raj Gokal, co-founder of cryptocurrency network solana, shared his own misgivings in a tweet last week.
“I worry that the metaverse is overhyped (industry-wide),” Gokal said. “I haven’t seen this much hype in mainstream media over an unreleased product or category of products, maybe ever.”
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