In recent months, the metaverse, the concept of an immersive version of the internet that integrates technologies such as virtual reality and NFTs, has emerged as one of the most hotly debated subjects in the crypto and blockchain industries. Citibank has published a research estimating the entire addressable market to be between $8-13 trillion by 2030.
However, there have been few clear possibilities for forward-thinking investors to gain exposure to this expanding business.
Now, one of the industry’s oldest exchange-traded product (ETP) providers is attempting to fill that void. 21Shares, a Switzerland-based ETP issuer managed by Forbes 30 Under 30 alums Ophelia Snyder and Hany Rashwan, is releasing its 30th product, a single-asset ETP based on SAND, the native token of The Sandbox’s metaverse project.
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The Sandbox is a virtual world similar to a blockchain-based Second Life in which users can engage with businesses and with one another. It has been rapidly acquiring partners such as Adidas, the Care Bears, and Snoop Dogg.
Snyder revealed exclusively to Forbes that this service is in response to increased consumer demand for possibilities to diversify beyond more mainstream and larger assets such as Bitcoin and Ethereum, as well as her conviction that the industry has reached a critical turning point in its evolution.
“The conversation has evolved away from, ‘Will bitcoin exist in three years?’ What will the cryptocurrency ecosystem look like in three years? As a result, the conversations we’re having with institutional clients are far more nuanced… “And the metaverse is one of those areas where you’re starting to see actual patterns develop in crypto,” Snyder explains.
Over the previous six months, SAND has outperformed the other blue chip metaverse coins, returning 328 percent to investors. However, it has outperformed competitors such as Decentraland (MANA), Axie Infinity (AXS), and Enjin (ENJ) year to date as part of a decline that began in December and has hurt the whole industry. This reduction also correlates with a drop in search interest for the metaverse in general, implying that the massive hype cycle that began when Facebook relaunched as Meta in October may be coming to an end. Snyder, on the other hand, believes that this downturn will turn out to be an aberration in the larger metaverse story.
The Sandbox is not 21Shares’ first foray into the metaverse. It debuted a MANA-focused product in February, with a little more than $1 million in AUM. This would make it roughly 50x less expensive than the Grayscale Decentraland Trust, a closed-end fund issued by Grayscale that is only available to authorized investors and institutions in the United States and has been available since February 2021.
In contrast, 21Shares products are readily traded on numerous European exchanges, but they are mainly unavailable to US investors until the Securities and Exchange Commission approves spot crypto ETFs. To yet, the SEC has only approved a few bitcoin futures ETFs, and 21Shares’ proposal for a spot bitcoin ETF, which it submitted with star investor Cathie Wood of Ark Invest, was rejected last week.
When asked how investors should compare the two offerings, Snyder emphasized the early infancy of the metaverse vertical, emphasizing the need of providing investors with diversification choices. She also stated that this is most likely not the end of 21Shares’ metaverse-related product releases.