JPMorgan: Metaverse Could Be $1 Trillion Annual Market

JPMorgan has published a paper on the Metaverse, estimating that the emergent virtual space could be a $1 trillion annual market opportunity. The investment bank has also opened a lounge in Decentraland. 

JPMorgan Jumps Into the Metaverse

JPMorgan has begun to explore the Metaverse.

The American investment bank has published a paper titled “Opportunities in the metaverse: How businesses can explore the metaverse and navigate the hype vs. reality” in which managing directors Christine Moy and Adit Gadgil have laid out a possible future for the Metaverse. In it, they wrote that the Metaverse could be a $1 trillion annual market opportunity because “it will likely infiltrate every sector in some way in the coming years.” 

The authors further added that there are multiple technologies converging and contributing to a “new digital age,” and that the Metaverse could be the force that creates “a unified immersive experience” for them.

They also provided data points to illustrate the scale of how the Metaverse could grow. For example, the paper noted that $54 billion is spent on virtual goods every year, and that the Metaverse-focused game The Sandbox has already sealed 200 strategic partnerships with the likes of Warner Music Group. It also pointed to the NFT market, which is currently valued at $41 billion. 

The paper also emphasized the potential for the Metaverse to impact social interactions, which they said could be deepened and extended digitally. It additionally charted what could be seen as the history of the Metaverse, referencing games like World of Warcraft, Fortnite, and Minecraft, as well as more recent developments like Facebook’s rebrand to Meta and Microsoft’s $68.7 billion Activision Blizzard acquisition. 

It also said that technologies like augmented reality, virtual reality, and blockchain, could build a new vision for the Metaverse, adding that the “democratic ownership economy coupled with the possibility of interoperability, could unlock immense economic opportunities, whereby digital goods and services are no longer captive to a singular gaming platform or brand.” 

The idea of a “democratic ownership economy” is considered one of the core tenets of Web3, and is therefore expected to play a pivotal role in the Metaverse. Many Metaverse-centric projects like Decentraland and Axie Infinity have their own tokens as a way of rewarding users.

While the paper shared a positive outlook on the future of the Metaverse, it noted that work is needed in areas like commercial infrastructure, regulation, taxes, and user privacy. Alongside the report, JPMorgan has also opened a lounge in Decentraland’s Metaverse, becoming the first bank to join the buzzy virtual world.

While JPMorgan is early to recognize the potential of the Metaverse, it’s not the only major player to have noticed the growing momentum surrounding the space. In November, digital asset management giant Grayscale posted a similar report predicting that the Metaverse could be a $1 trillion market, and Goldman Sachs has also given a multi-trillion dollar target for the space. Major companies like Adidas, Samsung, and McDonald’s have also rushed to follow Facebook’s lead amid the hype. As the Metaverse grows, it’s likely that other institutional players will join JPMorgan in the virtual realm.

Disclosure: At the time of writing, the author of this piece owned BTC, ETH, and several other cryptocurrencies.