Investing in the metaverse: UBS’s analysis

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    UBS has added the metaverse to its list Long term investment last month.

    UBS is Switzerland’s largest and most important bank, founded in 1998 by the merger of the Swiss Banking Federation and the Swiss Bank Corporation. But its roots go back to his 1862, when the Winterthur Bank was founded.

    The bank recently made headlines by acquiring near-bankruptcy Credit Suisse, further expanding its size and role as Switzerland’s undisputed leader.

    In fact, Switzerland is a major European cryptocurrency hub, with Zug and Lugano being the major cities in the sector. UBS itself, on the other hand, has been following this market for at least two years when it began exploring what services it could offer in relation to cryptocurrencies.

    UBS and Metaverse

    On its official website, in a section dedicated to so-called ‘long-term investments’, UBS lists various sectors.

    They range from robotics to big data, environment to energy efficiency, fintech to genetics, space to water scarcity.

    Many of these sectors are not particularly financially related, with the exception of fintech, family businesses, and some metaverses themselves.

    The Metaverse Visual One Pager sees it as a highly immersive virtual experience with wide-ranging business impact.

    Industries that can use the metaverse include advertising and clothing, as well as media and entertainment that already use the metaverse.

    According to Bloomberg, token-based transactions are expected to reach $10 billion in 2022 and continue to grow at a compound annual rate of 35% through at least 2030.

    According to them, this trend is being driven by the widespread adoption of cryptocurrencies and digital wallets, especially among young people.

    Investing in the metaverse

    According to UBS analysts, the Metaverse could take at least 10 years to fully materialize, with iterative improvements to the underlying infrastructure and artificial intelligence during that time.

    So this is not a sector that can generate a return on investment in the short term, and probably not in the medium term either.

    On the contrary, they argue that the sector will benefit from long-term positive trends in the medium and long term, leading to above-average earnings growth over the next decade.

    One of the strengths of the Metaverse cited by UBS is the fact that it is blockchain-based.

    In fact, they point out, blockchain can provide portability of digital objects and identities, and even serve as a single record of truth when combined with interoperable standards for tracking digital purchases. doing.


    UBS’s metaverse analysis paper explicitly mentions a number of metaverses, including Decentraland, The Sandbox, Cryptovoxels, and Somnium. In particular, Decentraland has been mentioned several times as it contains some famous historical brands from the world of physics and finance.

    Note, however, that the current market value of Decentraland’s MANA token is 90% below its all-time high in November 2021.

    MANA has been around since 2017 and, apart from a brief period during the bubble in early 2018, its price has never been above $0.1 before the last major bull market.

    However, it is now trading at $0.50, more than five times higher than it was three years ago. By 2021, however, he will reach about $6, more than tenfold at current levels.

    So in the long term its performance looks good, but in the short term it depends a lot on the general trend of the crypto market.

    The UBS document also mentions 50 companies connected or affiliated in some way with the Metaverse, including Apple, Alphabet (formerly Google), Meta (formerly Facebook) and Microsoft, but Netflix, Nvidia, Samsung, Also included are Siemens, Sony, Spotify and Xerox. And many people who still seem to have no direct connection with this world.


    In the conclusion of its analytical paper, UBS wrote that the Metaverse is still in its infancy and it is difficult to pinpoint real investment opportunities. This explains, for example, why we mention some of the related companies that seem to have nothing to do with technology.

    They reiterate that the full realization of the Metaverse could take up to 10 years, but the next five years could see a significant increase in investment in infrastructure, platforms, and enabling technologies for the Metaverse. I have made it clear that I believe there is.

    They also point out that younger generations are becoming a larger part of the consumer base and are digital natives who grew up in a world where technology is ubiquitous.

    So when all the groundwork is really laid, a more compelling experience can emerge and capture the consumer’s attention. Metaverse adoption will increase as the digital native population grows.


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