American investment bank Citi sees the metaverse economy growing to as large as $13 trillion by 2030. Citi also projected that metaverse users could grow to 5 billion by that time.
Citi On Why The Metaverse Has A $13 Trillion Upside
Interest in the metaverse has exploded in recent months since Facebook’s rebrand to Meta. For the uninitiated, the metaverse refers to the new iteration future of the internet, where users will interact with each other with 3D avatars. Many crypto firms and projects are rushing to build in the space as the promise of an open, virtual world owned by its creators and occupied by anyone with an internet connection has not gone unnoticed.
In a Thursday report, Citi noted that the metaverse is the “next generation of the internet — combining the physical and digital world in a persistent and immersive manner — and not purely a Virtual Reality world.”
“Based on our definition, we estimate the total addressable market for the Metaverse economy could grow to between $8 trillion and $13 trillion by 2030.”
The multinational bank, however, believes that for the Metaverse to fully enter the mainstream and get to that level, it will require considerable investment in cutting-edge infrastructure. To bolster the ecosystem, computational efficiency has to be enhanced by over 1,000 times from today’s levels, and “investment will be needed in areas such as compute, storage, network infrastructure, consumer hardware, and game development platforms.”
In the exhaustive 184-page report, Citi notes that the emergent metaverse will be community-owned and governed. Its use cases will range from commerce, art, social collaboration, and advertising to media and healthcare. Gaming, however, will remain the metaverse’s biggest use case in the next few years.
Citi further argued that the money used in the real world will be different from that used in the open metaverse. Cryptocurrencies like bitcoin and ethereum will be used in the virtual worlds, along with stablecoins and central bank digital currencies (CBDCs).
In addition, non-fungible tokens (NFTs) will be digital property in the metaverse. NFTs are a novel asset class that has recently shot to the forefront of the crypto space. They are essentially unique digital assets on the blockchain that are used to represent works of art and collectibles.
Citi further indicated that the growth of the metaverse will draw a swift wave of scrutiny from regulators and policymakers across the globe. Issues regarding anti-money laundering, the use of DeFi, cryptocurrencies, and property rights will need to be handled. In short, the hurdles faced during the launch of Web 2 will be magnified with the development of the internet’s next chapter.
That being said, Citi’s metaverse forecast is crazy bullish compared to Goldman Sach’s $8 trillion projection early this year.