Despite a waning interest from institutional investors due to the metaverse’s declining popularity after the recent bull run, BlackRock (BLK) has launched an exchange-traded fund (ETF) that primarily invests in tech companies that have exposure to the metaverse.
The iShares Future Metaverse Tech and Communications ETF (IVRS), according to its website, will focus on investing in companies that are expected to have an impact on the metaverse in various areas, including virtual platforms, social media, gaming, 3D software, digital assets, virtual reality, and augmented reality. The portfolio includes top companies like Meta Platforms (META), Apple (AAPL), Nvidia (NVDIA), Netease (NTES), and Roblox (RBLX).
Neal Stephenson’s science fiction book “Snow Crash” introduced the concept of the metaverse in 1992. In recent years, people have become more interested in the metaverse, thanks partly to the popularity of independent platforms like Decentraland and The Sandbox.
According to a recent survey by consulting firm KPMG, opinions on the development of the metaverse remain divided. While over 90% of investors believe it represents the next stage of the internet, many are cautious due to concerns about regulation, privacy, and adoption.
The funding of virtual social spaces has stalled in the midst of an ongoing crypto winter, despite large corporations like Microsoft (MSFT) and Meta demonstrating enthusiasm for the metaverse during the bull run. Four months after it was established, Microsoft reportedly terminated a project to promote using the metaverse in industrial settings. The Facebook Reality Laboratories (FRL) business, which includes Meta’s augmented and virtual reality operations, had a $14 billion loss in 2022.
Despite some institutional investors’ recent decline in interest, the new BlackRock ETF appears to focus on the metaverse’s longer-term potential. In a blog post from February 8, Reid Menge, co-portfolio manager of the BlackRock Technology Opportunities Fund, compared the current state of the metaverse to that of the early internet or smartphones, stating that it has the potential to impact people’s daily lives significantly.
The ETF has an approximate $5 million net asset value and is traded on the New York Stock Exchange. Rather than investing directly in cryptocurrencies, the fund primarily focuses on stocks. However, the fund’s prospectus indicates that it will invest in companies that facilitate using payment methods or digital assets within the metaverse.
Competing with other exchange-traded funds like Roundhill Ball Metaverse ETF (METV), Global X Metaverse ETF (VR), and Fidelity Metaverse ETF (FMET), BlackRock’s latest ETF will face a challenging market as all these products have experienced price declines in the previous year.