Investors bet on rising virtual real estate prices
Virtual real estate investor, Republic Realm, purchased a virtual plot of land on Sandbox ($SAND) for $4.3M — breaking a record 2.5M purchase just last week.
Virtual floodgate: Virtual worlds exploded in popularity after Facebook’s rebrand to Meta (NASDAQ:META) — sending just about everything virtual reality-related (VR) soaring. Everyone except Meta — which is only up 2% since its announcement.
Who let the bulls out: Virtual real estate investors are buying homes in prime virtual locations, developing retail spaces for rental and even designing and building houses with architects and programmers.
- “This is like buying land in Manhattan 250 years ago as the city is being built,” — Andrew Kiguel, CEO of Tokens.com.
- “It’s inevitable that the metaverse will be the No. 1 social network in the world.” — Michael Gord, co-founder of Metaverse Group.
Back to reality: Investors are betting on rising virtual real estate prices — with various virtual worlds to choose from investors, including Decentraland ($MANA) and Sandbox. But unlike investing in real-real estate:
- Investors need to figure out which virtual world will stick around — whereas there’s only one real world to bet on.
- Property prices are closely tied to volatile crypto prices, as per Zach Aarons of MetaProp (via WSJ).
Sam Bankman-Fried — co-founder of FTX, the largest crypto exchange — cautions investors to focus on the cryptocurrencies with important use cases (via Insider).
- “I think the ones that seem more hype-driven often crash the hardest”.
- Focus on projects that have potential for real adoption — a.k.a. the ones loyalists back even during a bear market.