BlackRock Launches Metaverse ETF Despite Declining Mass Adoption

BlackRock (BLK) the investment giant has launched an exchange-traded fund (ETF) which focus on tech companies that are into the metaverse, despite the declining mass adoption by some institutional investors.

The concept of metaverse was first coined in Neal Stephenson’s 1992 science fiction novel “Snow Crash,” and has expanded in recent years, with independent platforms like Decentraland and The Sandbox gaining considerable market share. More so, big tech companies such as facebook, had also jumped on the metaverse bandwagon, and also changed its name to Meta. Metaverse has drawn the attention of many companies and over 90% of investors still believe the metaverse is the next phase of the internet.

According to reports, companies that are directly into metaverse and contributing to the metaverse ecosystem in areas such as
virtual platforms, social media, gaming, 3D software, digital assets, and virtual and augmented reality are expected to receive huge investment from the iShares Future Metaverse Tech and Communications ETF (IVRS). Some of these companies included Meta Platforms (META), Apple (AAPL), Nvidia (NVDIA), Netease (NTES) and Roblox (RBLX)

ETF is much interested in tracking the investment generated from the metaverse ecosystem as it clearly stated this on its website “The iShares Future Metaverse Tech and Communications ETF seeks to track the investment results of an index composed of US and non-US companies that provide products and services that are expected to contribute to the metaverse in areas including virtual platforms, social media, gaming, 3D software, digital assets, and virtual and augmented reality.”

Therefore, BlackRock ETF is set to primarily focus on equities, and has a net asset value of around $5m and trades on the New York Stock Exchange (^AMZI). But even at this, BlackRock ETF will face a steep competition from the likes of Global X Metaverse ETF (VR), Roundhill Ball Metaverse ETF (METV) and Fidelity Metaverse ETF (FMET).

However the public perception toward building the metaverse remain mixed and a large number of investors remain cautious due to regulatory, privacy and adoption concerns, thus making them slow in throwing in their money.
More so, major companies like Microsoft (MSFT) and Meta demonstrated enthusiasm for the metaverse during the bull run, their funding of virtual social spaces has slowed amid an ongoing crypto winter. Microsoft was reported to have recently ended a project intended to encourage the use of the metaverse in industrial environments just four months after it was formed. Meanwhile, in 2022, Meta lost about $14 billion in its fledgling Facebook Reality Labs (FRL) division, which comprises its augmented and virtual reality operations.

BlackRock is positioning itself for the longer-term potential of the metaverse technology, considering the timing launch of its ETF.

By 4niso

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