Bank of America analyst: Metaverse offers “great opportunity” for cryptocurrencies – but not for Bitcoin
The new tech trend is called Metaverse. In addition to the Facebook group Meta, other technology groups are also working on the digital world. Virtual reality could be a great opportunity, especially for cryptocurrencies, as Haim Israel of Bank of America predicts.
• Metaverse trend in development
• Crypto adaptation could be promoted
• Already prospect of meta successors
Bitcoin & Co. is not yet a common means of payment
Trading in cryptocurrencies is no longer a marginal phenomenon. Bitcoin, the largest crypto currency in terms of market capitalization, has exceeded its previous high several times this year despite its high volatility. Accordingly, more and more – and above all more diverse – investors are drawn to the crypto market.
At times, the electric car manufacturer Tesla was able to make payments with the crypto veteran, but due to the high power consumption that is generated when mining the Internet coins, CEO and Bitcoin fan Elon Musk put a stop to crypto payments. Most recently, however, the entrepreneur announced that he wanted to offer Tesla merchandise, which could then also be purchased with the meme currency Dogecoin. But even if some retailers already offer payment with crypto currencies, the digital assets are not yet accepted as a common means of payment. However, this could change with the introduction of the Metaverse, as Bank of America analyst Haim Israel predicts.
Zuckerberg Group is working on Metaverse solution
In an interview with “Markets Insider”, the strategist recently emphasized the hopes he has for the successor to the current Internet, which is to combine virtual and physical reality. In a digital 3D world, users should be able to move around and interact with one another with the help of their own avatars, as reported by the US magazine “Time”. In addition to different games, transactions should also be possible. At the moment, tech companies in particular, which among other things supply the hardware or software for the concept – including NVIDIA or Snap – have plans for an entry into the Metaverse. Facebook founder Mark Zuckerberg is so serious about the topic that he recently renamed the social media group Meta without further ado. Only a few days ago the virtual world “Horizon Worlds” was opened there for all users in the USA and Canada who are over 18 years old, as the company announced. The software had previously been tested in a closed beta program. The application is available on Meta’s own VR headsets Quest 1 and 2, with support for the first device version ending in January.
“Great opportunity” for cryptocurrencies
But the developers of the crypto currency IOTA are also striving to implement the coin in the digital world. And so Israel also sees enormous potential for cyber currencies in the new Internet world, as he explained to the portal. “I definitely believe this is a great, great opportunity,” said the major US bank strategist. “You need the right platforms … this will definitely be a great opportunity for this entire ecosystem.” According to the expert, not only should cryptocurrencies receive a significant boost in demand through the Metaverse, the coins could then also be increasingly accepted as a means of payment.
Crypto Adaptation Without Bitcoin?
Here, however, the analyst is not primarily thinking of the major cryptocurrencies such as Bitcoin and Ether. Due to their volatility, these should hardly have a chance in regular payment transactions, according to Israel. Instead, the time could now come for stablecoins, which are significantly less prone to fluctuations due to their link to the rate of a fiat currency. The crypto adaptation should also serve that the blockchain technology, which is used in the Metaverse, also underlies most crypto currencies. This means that the digital assets can be integrated into the Internet successor and retain their decentralized nature. A control by payment providers or technology companies is not possible, the expert continues.
More support from payment companies is conceivable
Nevertheless, the establishment of cryptocurrencies in the Metaverse could only be an intermediate step in the success story of digital currencies, Israel warned. With broader acceptance in virtual reality, traditional payment companies could also increasingly accept cryptocurrencies and expand their involvement in this area. “I see a lot of collaboration between the two of them,” said the Bank of America strategist. For example, the payment provider PayPal is already offering its US customers the option of buying, selling or holding cryptocurrencies. Other companies could follow suit after the meta launch.
Metaverse in the hands of tech giants
Despite the confident assessment of Israel, the meta-concept also has some critics, as the portal further reports. For example, the fact that virtual realities, such as the video game “Second Life”, have existed for several years and that VR headsets have not yet been accepted by the masses is causing displeasure. There is also growing concern that the digital world will be dominated by large corporations like Meta and that cryptocurrencies will not only lose their decentralization, but will also prevent the broad acceptance of coins, according to “Markets Insider”. One of the critics of the meta platform is Ben Gilbert, co-founder of the startup studio and venture capital fund Pioneer Square Labs.
It feels weird that so many are grouping “web3” with “metaverse”.
I am not convinced the metaverse will be user-owned or decentralized if it is developed by Meta, Microsoft, Apple, etc. (which is where $10B’s are being spent to develop it!)
– Ben Gilbert (@gilbert) November 14, 2021
“I’m not convinced that the Metaverse will be user-managed or decentralized if it is developed by Meta, Microsoft, Apple, etc.,” Gilbert said in a Twitter post. Accordingly, the PSL managing director is surprised that the Metaverse is being associated with the Web3 concept.
Web3 as an alternative for cryptocurrencies?
The open network Web3 is already being traded as the successor to Metaverse – even though the concept is still rarely used. According to Deutschlandfunk, the “new level” of the Internet is characterized above all by security, transparency and more justice. “There is no single server anywhere or a single data center anywhere that belongs to any company, but that is distributed globally to all computers that participate in the blockchain,” the radio program “ct” quoted editor of Sylvester Tremmel as saying. Accordingly, the control over the “new” Internet should then no longer lie with the large tech companies that Gilbert criticized. Instead, there is mutual control by many small units that are managed by the users themselves. These should then be able to be purchased through crypto currencies as a kind of crowdfunding. The advantage of this type of capital procurement is that no other platform is interposed.
Until then, however, it remains to be seen how the plans for the Metaverse will develop – and what that means for the crypto market.