Citi says metaverse could be worth up to $13T, predicts 5B users

Citi analysts' latest metaverse report is bullish on adoption, estimating the industry could reach $13 trillion by 2030.
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Citibank (Citi) analysts recently estimated the budding metaverse industry could be worth up to $13 trillion by 2030 — roughly the value of all gold on the market today.

The metaverse is a catch-all for virtual worlds like Second Life, Minecraft, or the newer blockchain-powered Decentraland.

In the metaverse, users can create avatars, interact with others, and own assets like plots of virtual land, skins, tickets, or in-game items. The concept also includes augmented reality that people can access through mobile devices like smartphones.

Crypto companies often pitch the idea to tokenize and deploy these metaverse-compatable digital assets on blockchains.

The $600-billion social media giant Facebook renamed to Meta as a sign of its intent to focus on metaverse gaming last year. Meta’s Oculus virtual reality division is leading the initiative.

Metaverse awareness skyrocketed with Facebook’s rebranding, as well as the popularity of NFTs that can represent ownership of items in virtual worlds.

Citi’s metaverse report talks next generation technologies.

Citi sees co-existence of many crypto assets in the metaverse

Citi is a $100-billion institution with a well-staffed Wall Street research division. Its latest report on the metaverse forecasts that related platforms could onboard up to 5 billion users within the next eight years.

Five billion users is an incredible number, but it’s worth stressing that it appears Citi is using “metaverse” interchangeably with “web3.”

So, the logic clearly goes: if web3 is truly the next iteration of the internet, then it would automatically inherit a large userbase from “web2.”

“We discuss the possibility that the metaverse is moving towards becoming the next iteration of the internet, or web3,” wrote Citi’s analysts.

“This ‘Open Metaverse’ would be community-owned, community-governed, and a freely interoperable version that ensures privacy by design.”

Indeed, the Citi report called for consideration of the nature of money in an environment where digital currencies, stablecoins, and sovereign crypto assets are likely to coexist.

The metaverse will also include blockchain-based web3 apps to improve payments, researchers noted.

  • Accelerating adoption of the metaverse would require significant investment in computing infrastructure.
  • A truly immersive metaverse environment will require internet latency of less than 12 milliseconds.
  • Experts expect the metaverse will significantly impact society. Mental health experts already ponder the possible impacts of Mark Zuckerberg’s vision of the metaverse, for example.

Citi mentioned potential pitfalls of using crypto assets, including price volatility, illiquidity, money laundering concerns, and collateralization requirements ⏤ especially in the case of stablecoins like Tether and Circle’s USD Coin.

Industries that will be early adopters of the metaverse, according to Citi analysts, include developer and content creator communities, smart manufacturing, advertising, healthcare, virtual events, education, and social commerce.

For these industries, the metaverse is said to facilitate congregation, public services, and community activities.

Like the metaverse, many people are jumping into crypto and learning as they go. According to Gemini, over 44% of US and Latin American crypto owners bought digital assets for the first time in 2021.

No doubt, the metaverse will take time to fully mature. Citi still anticipates the industry will develop enough by 2030 to reach its target capitalization of $8 to $13 trillion. For scale, PwC predicts the AI industry will contribute $15.7 trillion to the global economy by the same year.

Although, that figure would ultimately include swathes of non-crypto native companies and related infrastructure that might not run on blockchains directly.

Citi’s map of the different digital assets that analysts anticipate will power the metaverse.

Read more: [Nike sues over sneaker NFTs to clean house before metaverse arrives]

“In the current state, the internet infrastructure is unsuitable for building a full-immersive, content streaming metaverse environment, that enables users to go seamlessly from one experience to another,” wrote Citi analysts.

“To make the vision of Metaverse a reality, we expect significant investment in a confluence of technology. Low latency — the time it takes a data signal to travel from one point on the internet to another point and then come back — is critical to building a more realistic user experience.”

It’s clear that the metaverse concept has attracted significant attention over the past year. But blockchain-powered metaverse plays will have to accelerate their growth dramatically to keep up with Citi’s lofty userbase projections.

Leading crypto-metaverse platform Decentraland currently boasts around 2,000 users — a tiny fraction of the 5 billion users Citi believes will be onboarded this decade.

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