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With the development of blockchain technology, owning a house in the metaverse has become a new interpretation of the American dream.We know that the main factor driving the earthquake in the housing market is the central bank interest rates.Current Treasury yields are at all-time lows, a quarter of the amount of the 1980s.
Low interest rates make investment in fixed-income assets less attractive.In 2021, eight of the 10 metropolitan areas rose more than 10% in average home prices.Fifty years ago, average home real estate spending was twice the average American household income, now more than four times.
All of this data points to an important question: where should people put their money?
Economic crisis was born in the Metaverse
Usually, the economic crisis provides new purchase opportunities for the next generation of investors, and the decline in asset value is also the correction and release of a social crisis, giving birth to the prototype of the new economy.This time, the Meta-cosmic frenzy dominated by millennials is triggering a redistribution of wealth.Young people are creating their own asset classes and volatility.In 2021, these forces are concentrated in cryptocurrencies and NFT. They are a mixture of market volatility, technological innovation, and a decentralized culture.
But because mainstream crypto assets have become too premium and increasingly related to the stock market.Young new entrants realize that the threshold is lower and higher returns for investing in the meta-Universe and NFT. I believe 2022 will bring more attention to the metaverse and possibly more upside, especially virtual real estate.
The logic of virtual real estate is simple: the value of plots in the digital world is determined by factors similar to the factors that drive the value of physical real estate- -namely, the value of encrypted cultural scarcity / historical events / cool / development difficulty / visibility of the neighborhood.In virtual platforms like Sandbox, if you are near the Genesis lot, the pricing must be very high.
Once you have it, it's yours.You can develop real estate, rent, have friends come over, hold virtual parties, open shops or a virtual theme park, and you can do everything except that you can't actually sleep there.
Unfettered youth culture
Why do I think that metaverse real estate may be a Gamestop copy in 2022?The value of real estate never drops, and metaverse ownership makes young people more attractive to potential partners.In the context of the highly solidified wealth in today's society, young people are eager to re-establish order through their own independence. Especially, under the anti-authority and anti-mainstream value orientation, young people all over the world are looking for a new way out.
Money is pouring into the Mettaverse. In 2021, virtual real estate sales exceeded $500 million.Analysts expect that number to double by 2022.What innovates in the web3 era is that they don't base them on any tangible income, let alone profit.Similar to cryptocurrencies, virtual real estate will be filled with speculation and artificial inflation.As long as the project side will tell stories, the valuation can be completely unconstrained by reality.
Today, few young people can afford humble houses on land, so why not build a palace in Decentraland?
Of course, everyone has to ask themselves how much net worth can they afford to invest in virtual real estate?That is, how much that you are willing to lose.If I were 25, I would probably invest 10% of my total assets in the Metaverse. Giving a small portion of the portfolio to crazy speculative projects could provide asymmetric return space.
The life that the American dream shows is so colorful, and it is different for every generation of young people.
*The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of SparkDAO. Every investment and trading move involves risk, you should conduct your own research when making a decision.
