BlackRock launch ETF for the Metaverse
BlackRock is launching a new ETF that will invest primarily in tech companies related to the Metaverse. The iShares Future Metaverse Tech and Communications ETF fund will include companies involved in virtual platforms, social media, gaming, 3D software, digital assets, and virtual and augmented reality. The top five companies featured in the holdings are Meta Platforms, Apple, Nvidia, Netease, and Roblox.
The surprise move comes at a time of waning interest from investors to developers and players. Nearly half of the game developers question if the Metaverse will ever deliver. In recent weeks Microsoft and Tencent have stepped back from the Metaverse, with both companies closing related projects. Decentralised platforms offering web3 ideology, however, are bucking the trend, with Yugo Labs Otherside, Decentraland and The Sandbox all making gains. Meanwhile, Epic Games continue to redefine the space with breathtaking photo-realistic graphics through Unreal Engine 5.
The BlackRock ETF follows other metaverse-related funds such as Global X’s Metaverse ETF (VR), Roundhill Ball Metaverse ETF (METV), and Fidelity’s Metaverse ETF (FMET). The new fund provides large investors such as BlackRock with a way to invest in the Metaverse’s future.
Of the top 5 funds BlackRock features, only Roblox currently has a proven formula for the space with a predominant child-centred Metaverse platform. Apple is releasing Apple Glasses and hopes to redefine the space with augmented reality. Meta Platforms hopes to introduce a unified Metaverse experience with a focus on programming over VR experiences. Netease is an incredibly powerful player in Asia with a large focus on gaming, from eSports to mobile titles. NVIDIA has yet to make an announcement but is a leading producer of AI technology, graphics cards and general computing hardware.
By investing in the Metaverse, BlackRock is making a bet that the technology will continue to grow and become a major part of the future. The fund also provides investors with access to tech companies involved in the Metaverse that previously may have been difficult or impossible to access through standard investments. But more fundamental aspects are in play here with web3 technology challenging the ancient architecture of centralisation. Traditional investors must assess the potential of the Metaverse, including access to its technologies and the risks of data privacy and censorship, to capitalise on its growing maturity.
Investors have long been intrigued by the idea of a digital world that could offer users various experiences ranging from gaming to work. The Metaverse industry has rapidly evolved in recent years, with increased interest and investment in virtual worlds, business applications, and gaming. With the rise of blockchain technology, the industry is poised for even more dramatic advancements as developers are empowered to create and innovate with unprecedented security and reliability.
BlackRock’s latest ETF is a clear sign of the asset manager’s commitment to the Metaverse and its potential for further development. It also signals a shift in its outlook on technology investments and its willingness to explore investing in new markets. For tech companies involved in the Metaverse sector, BlackRock’s ETF provides an attractive option for raising capital. The fund offers increased visibility and access to larger pools of investment capital that could prove instrumental in helping these companies realise their potential.
BlackRock’s new fund provides an opportunity for investors to get involved with Metaverse technology. However, it is important to consider the risks associated with such investments before taking the plunge. The Metaverse is constantly changing, and what is popular today may be abandoned in the future. Gamers (which are the primary user base) move on, and this year’s hotspot may become a virtual ghost town. DAO’s give gamers and creators a vested interest in developing and playing on the Metaverse platform and offer a stickability centralisation can not compete with. BlackRock’s market monopoly in the real world may not translate to a virtual audience as the users embrace web3 metanomics and the ability to own their own part of the Metaverse.